Cyprus’ Banks Have Reopened: Here’s What You Need to Know

Cyprus’ banks reopened Thursday for the first time in nearly two weeks and things have so far been remarkably calm.

“Across Cyprus, large but orderly lines formed ahead of the opening of banks for six hours from noon, and guards from private security firms reinforced police outside some ATMs and banks in the capital, Nicosia,” the Associated Press report.

“People filed calmly into banks across the country once they had opened, and no crowd issues were reported,” the report adds:

There have been no reports of panic or disorderly conduct. In fact, as of this writing, it has been the exact opposite.

As noted yesterday on TheBlaze, the European Central Bank has flown in billions of euros to help Cyprus prepare for the re-openings. Here’s a stunning photo of a convoy of trucks transporting tons of euros to various banks throughout the small country:

“A policeman stands guard in front of trucks carrying containers at the Central Bank in Nicosia March 27, 2013. The contents of the containers could not be verified by Reuters but local media reported they contained cash for the banks’ reopening on Thursday.” (Reuters).

“For Cypriots, who have been struggling to cope with the bank closures that have seen cash rationed at ATMs, the reopening of bank branches was an orderly, welcome development, despite the stringent new controls on the use of cheques and the export of cash,” writes 4 News’ Faisal Islam (who is on the ground in Nicosia).

“So far, it would be wrong to call this a bank run, even though it looks like one. It’s transactional demand for cash after two week closure,” he adds.

The 4 News economics editor then tweeted the following photos of Cypriots definitely not rioting or panicking:

“I met Carmen from Yorkshire and her 88yo mum Stella in the queue. Stoic. been carefully preserving cash. No panic.”
“This man has done a list in arrival order of the 21 people outside this Bank of Cyprus branch. Very civilised.”

“Calm, dignified, and not a bank run. But impossible for it to be so, because of capital controls. Cypriots making best of bad situation,” writes Faisal Islam, economic editor for 4 News.

“Policeman hands out Capital Controls decree. Mood a little less stoic. Laiki still not open. technical difficulties.”

The Cypriot government announced Thursday that capital controls would be imposed so as to avoid a run on the banks. Under these new rules, which are only supposed to last only seven days, depositors will not be allowed to do any of the following [via Reuters]:

  • Cash a check
  • Withdraw more than €300 a day
  • Take more than €3000 in cash per person in any currency out of the country
  • Purchase more than €5000 in foreign goods and services with a credit card each month
  • Make non-cash payments outside Cyprus without documentation showing they are paying for imports

Of course, this isn’t to say that many aren’t expecting (hoping?) for bank chaos:

“I know it’s early, but so far this ‘bank run’ has something of the Monty Python about it.” (Courtesy ‏@JoeWSJ).

Here’s a copy of the final decree on capital controls from Cyprus’ Ministry of Finance:

Final Thought: We’re several hours into the re-openings and everything has been calm and orderly (much to the chagrin of many). In fact, Black Thursday in the U.S. is much, much uglier than this.

“Surprisingly, little panic as Cyprus banks reopen,” writes Dipti Kapadia, multimedia producer for The Wall Street Journal.

However, and Business Insider’s Sam Ro agrees with us, let’s wait seven days until the capital controls are lifted. Once the strict limits on depositors are removed, things may get real interesting, real fast.


Follow Becket Adams (@BecketAdams) on Twitter

Front page photo courtesy Reuters.