CLEAN : Cyprus bailout ailing banking sector

The Cyprus economy faces significant challenges due to its ailing banking sector, heavily impacted by the Greek crisis. Past bailouts often relied on taxpayers, but Cyprus's finance minister sought a different approach. A controversial decision to impose charges on deposits below €100,000 sparked market turmoil and delayed a bailout vote. Concerns arose about potential bank runs in other European countries. Additionally, a third of Cyprus's bank deposits are held by Russian nationals, who are also affected by the new charges.

What was a major factor contributing to the instability of the Cypriot banking sector?

• Overinvestment in technology

• Lack of government regulation

• Spillover from the Greek crisis

• High inflation rates

What was the unique approach taken by the Cyprus finance minister during the bailout?

• Imposing a levy on all bank deposits

• Reducing interest rates

• Increasing government spending

• Privatizing state-owned banks

What was the market's expectation regarding the deposit levy in Cyprus?

• It would only affect foreign investors

• It would be applied to all deposits equally

• It would only affect deposits above €100,000

• It would not be implemented at all

Which countries were mentioned as potentially facing pressure on bank deposits similar to Cyprus?

• United Kingdom and Ireland

• Portugal, Spain, and Italy

• Sweden and Norway

• France and Germany

What proportion of Cypriot bank deposits are held by Russian nationals?

• One third

• Two thirds

• One quarter

• One half