Head Of Bank Of Cyprus Quits After Appointment Of Special Administrator

The chairman of the Bank of Cyprus abruptly stepped down after a special administrator was appointed to oversee its restructuring in the wake of a painful bailout of the island-nation by international lenders.

Antreas Artemis’s resignation, The New York Times reports, was “not wholly unexpected” but “still caught the market by surprise and was a further reminder of how volatile and uncertain Cyprus’s financial system has become in recent days.”

Dinos Christofides was appointed Monday night by the Central Bank of Cyprus to act as a special administrator to oversee “the restructuring of the bank and the absorption of part of Cyprus Popular Bank”, he tells Reuters.

“It means that from now until further notice I will be running the bank,” he said. “It could be short term … or it could be longer.”

NPR’s John Psaropoulos, reporting from Nicosia, says the resignation of Artemis comes as the Bank of Cyprus prepares to absorb . the country’s second-biggest lender, Laiki Bank. In the process, depositors with more than $130,000 in their accounts will be levied a one-time charge of as much as 40 percent of their savings.

“But while both banks are crunching the numbers, nobody knows what their assets will be at the end of the day,” Psaropoulos says. “Today’s resignation [of Artemis] could throw a wrench in the entire process.”

He says employees, unsure about their jobs, protested outside the Bank of Cyprus headquarters in Nicosia.

Meanwhile, Greece’s Piraeus Bank agreed Tuesday to buy the Greek operations of three Cypriot banks for $678 million, according to The Associated Press.

Piraeus, which was selected last Friday to take over the Greek units of the Bank of Cyprus, Laiki and Hellenic … says the Cypriot bank branches in Greece would re-open Wednesday, a day earlier than in Cyprus.

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