Cyprus bailout eyes up to €10 billion for banks

Cyprus is awaiting an interim report from consultants on the capital needs of its banking sector, expected by December 7 - one part of a bailout that analysts believe could total as much as €17.5 billion.

Asked what had been tentatively established as a recapitalisation amount for the banks in a preliminary agreement with the European Union and International Monetary Fund, Governor Panicos Demetriades told journalists: "Nobody actually knows for sure."
"A figure has been put on the draft MOU ... we can say up to €10 billion," he added.

The figure is understood to be a rough working assumption pending data to be supplied by Pimco, consultants recruited to assess the island's banking sector.
It includes €1.8 billion the state has already provided to the island's second largest lender Cyprus Popular Bank, which was badly burned by Greece's debt write-down earlier this year.
Cyprus, the euro zone's smallest economy after Malta, sought aid from the IMF and its European Union partners in June.

Cypriot authorities say they have concluded a preliminary agreement with lenders, which may be put for approval to euro zone finance ministers at a meeting in mid-December.
In a report this week, credit ratings agency Moody's said it estimated the cost of recapitalising the island's three largest bank to a 10 percent Core Tier 1 would exceed €8 billion - equivalent to around 47 percent of Cyprus's entire economy.