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The Cyprus crisis through the lens of bank investors
Abstract: Last year, Cyprus joined its neighbor Greece on the list of eurozone countries in financial crisis. Although Cyprus is one of the smallest economies in the euro area, following the announcement of the official financial aid package for Cyprus on March 16, 2013, bank investors in the rest of the eurozone suffered large losses. Our analysis indicates that bank investors interpreted the Cypriot aid package as potentially forming a template for future eurozone bank restructurings, whereby bank investors would bear a higher fraction of the resolution costs. .
Keywords: Bank investments; Euro; Financial crises;
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Bibliographic Information
Provider: Federal Reserve Bank of Chicago
Part of Series: Chicago Fed Letter
Publication Date: 2013
Issue: Oct
Order Number: 315