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The Journal Gazette

Tuesday, April 02, 2013 4:41 am

Laiki's UK arm to escape Cyprus deposit charge

The Associated Press

The Bank of England's new financial watchdog says savers, big and small, in the British arm of the Cypriot bank Laiki will not have to pay a levy on their deposits.

The Prudential Regulatory Authority says 270 million pounds ($410.5 million) worth of deposits in Laiki Bank U.K. have been transferred to the Bank of Cyprus' U.K. arm. Deposits of up to 85,000 pounds per customer were already guaranteed under British laws.

Laiki operated as a "branch" in Britain, which could have meant its depositors were subject to the charge. But because of Tuesday's transfer, it will become part of a subsidiary fully regulated under British rules.

Big depositors in the Cyprus branches of Laiki may end up paying a charge as high as 60 percent.