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On 25 March 2013, the Bank of Cyprus and Laiki Bank (also known as Cyprus Popular Bank) entered resolution proceedings under the Resolution of Credit and Other Institutions Law 2013.
Laiki Bank, the second largest Cypriot bank, was immediately resolved and split into three parts: (i) its Greek operations which were sold to Piraeus Bank in Greece, (ii) a “good bank” comprised of deposits below EUR100,000 which were transferred to the Bank of Cyprus, and (iii) a “bad bank” comprised of deposits above EUR100,000 (holders of which will take part in Laiki Bank’s liquidation, including the bank’s remaining overseas operations and the 18% share capital of Bank of Cyprus received by Laiki Bank as compensation in the resolution process). Additionally, Laiki Bank’s EUR9.2 billion Emergency Liquidity Assistance loan liability to the Central Bank of Cyprus was transferred to Bank of Cyprus and enjoys super-pri