Topic: Cyprus Bailout
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MOSCOW, March 22 (RIA Novosti) - Standard & Poor's Ratings Services has lowered its long-term sovereign credit rating on the Republic of Cyprus to 'CCC' from 'CCC+' with a negative outlook, the ratings agency reported.
S&P has also affirmed its short-term sovereign credit rating on Cyprus at 'C'.
“The downgrade mainly reflects our view of the acute problems in Cyprus' banking sector. Since early 2012, Cyprus' domestic banks have repeatedly suffered losses because of write-downs on their holdings of Greek government bonds and credit losses on their Greek and domestic private-sector loans,” the agency said in a report on Thursday.
Anxiety spread across Europe on Tuesday after the Cypriot parliament overwhelmingly rejected a windfall levy on bank accounts that international creditors, including the EU and the International Monetary Fund, had set as a condition for providing a 10 billion euro ($13 billion) bailout.
The bill rejected this week envisioned a 6.75 percent levy on deposits of less than 100,000 euros ($128,950) and 9.9 percent on larger deposits.
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Any response would likely boomerang on Russia – the partnership between Rosneft and ExxonMobil is a case in point. The United States has hit Russia with a third round of sanctions. This time the Americans went with a higher caliber weapon, targeting Russia’s biggest energy companies (Rosneft and Novatek) and banks (VEB and Gazprombank).