Fitch downgrades Cypriot banks

Ratings agency Fitch has downgraded Cyprus Popular Bank and Bank of Cyprus to 'D' and 'RD'. Hellenic Bank remains on negative watch.

The European Central Bank's Benoît Cœuré has said that Eurozone depositors have nothing to fear, remarking that Jeroen Dijsselbloem was wrong to say that the Cypriot bail-in would be a model for other countries. Cœuré said that no other European country has Cyprus' situation. Our banking reporter Tim Wallace on Dijsselbloem's comments:

“We should aim at a situation where we will never need to even consider direct recapitalisation. If we have even more instruments in terms of bail-in and how far we can go on bail-in, the need for direct recap will become smaller and smaller,” he said.

“I think the approach needs to be, let’s deal with the banks within the banks first, before looking at public money or any other instrument coming from the public side. Banks should basically be able to save themselves, or at least restructure or recapitalise themselves as far as possible.”

Dijsselbloem’s proposal marks a change from previous bailouts where depositors have been left untouched.

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"The first lesson is that we need better control of banks," Coeure told Europe 1 radio. "We need an independent European regulator, and that will be the case by mid-2014 and it will be the ECB, and we need to identify problems earlier in the euro zone."