Bankers offer Cypriot-only solution to avert default

The chiefs of the local banks are urging the government to avoid a bank levy on foreign savers as this would be “catastrophic” and about 50% of deposits would be wiped out with foreign-owned branches closing overnight that would spell the end of the Cypriot ambitions to become a finance services centre.
The bankers are expected to submit their proposals to President Nicos Anastasiades today, where they will say that raising the 5.8 bln in order to secure the remaining 10 bln in rescue funds should be a “Cypriot solution”.
The proposals will include measures to counterbalance any bank levy, by introducing lower interest, extension of repayment and government bonds or other instruments linked to future natural gas revenues.
Also, plans include the immediate restructuring of Bank of Cyprus and Popular Laiki, to include their ‘good bank’ and ‘bad bank’ assets as well as a selloff of overseas operations, while mergers and closer cooperation with third lender Hellenic and the Coops is also on the cards.
Banks will remain closed on Wednesday, but ATM machines will continue to be replenished, as the government tries to revise its bank levy legislation and probably resubmit it to parliament.