Cypriots face strict capital controls

City A.M. Reporter

CYPRUS is preparing its capital control measures this morning to prevent a run on the banks by depositors when they open their doors tomorrow.

Cypriots have taken to the streets of Nicosia in their thousands to protest at a bailout deal that they fear will push their country into an economic slump and cost many their jobs. European leaders said the deal averted a chaotic national bankruptcy that might have forced Cyprus out of the euro.

Banks are due to open tomorrow, and the control measures are expected to be ready this morning.

The central bank governor said earlier that "loose" controls would apply temporarily to all banks. Earlier, the finance minister said they could be in place for weeks.

Banks have been shut since final bailout talks got under way in mid-March.

Under the terms of the bailout Cyprus Popular Bank – known as Laiki – is to be shut down and its accounts of under €100,000 combined with those of the Bank of Cyprus.

Accounts of more than €100,000 at both banks will be frozen, with depositors likely to lose much of their investment.