The 2012–2013 Cypriot financial crisis is a major economic crisis in the Republic of Cyprus that involves the exposure of Cypriot banks to the Greek Debt Crisis, the downgrading of the Cypriot economy to junk status by international rating agencies, the consequential inability to refund its state expenses from the international markets and the reluctance of the government to restructure the troubled Cypriot financial sector.
On 25 March 2013, a €10 billion bailout was announced in return for Cyprus agreeing to close its second largest bank, the Cyprus Popular Bank (also known as Laiki Bank), levying all uninsured deposits there, and possibly around 40% of uninsured deposits in the Bank of Cyprus (the Island’s largest commercial bank), many held by wealthy citizens of other countries, significantly Russia, who use Cyprus as a tax haven. All insured deposits of 100,000 Euros or less will not be affected.