Laiki will be resolved immediately - with full contribution of equity shareholders, bond holders and uninsured depositors - based on a decision by the Central Bank of Cyprus, using the newly adopted Bank Resolution Framework.
Laiki will be split into a good bank and a bad bank. The bad bank will be run down over time.
The good bank will be folded into Bank of Cyprus (BoC), using the Bank Resolution Framework, after having heard the Boards of Directors of BoC and Laiki. It will take 9 billion Euros of ELA with it. Only uninsured deposits in BoC will remain frozen until recapitalization has been effected, and may subsequently be subject to appropriate conditions.
The Governing Council of the ECB will provide liquidity to the BoC in line with applicable rules.
BoC will be recapitalized through a deposit/equity conversion of uninsured deposits with full contribution of equity shareholders and bond holders.
The conversion will be such that a capital ratio of 9 % is secured by the end of the program.
All insured depositors in all banks will be fully protected in accordance with the relevant EU legislation.
The program money (up to 10 billion Euros) will not be used to recapitalize Laiki and Bank of Cyprus.