March 26, 2013 / 10:36 AM / in 6 years

ECB's Nowotny says Cyprus is a special case

Austrian National Bank (OeNB) Governor and ECB Governing Council member Ewald Nowotny listens as he briefs the media during a news conference in Vienna March 14, 2013. REUTERS/Leonhard Foeger

PRAGUE (Reuters) - The banking crisis in Cyprus is a special case and the rescue plan used is not a model for other countries, European Central Bank Governing Council member Ewald Nowotny said on Tuesday.

Early on Monday, Cyprus managed to clinch a deal with international lenders to shut down its second-largest bank and inflict heavy losses on uninsured depositors in return for a 10 billion euro ($13 billion) bailout.

Nowotny echoed earlier comments from ECB Executive Board member Benoit Coeure, who disagreed with Eurogroup head Jeroen Dijsselbloem’s assertion that the Cyprus bailout would serve as a model for crises elsewhere. The Dutchman later backtracked on his comments after markets read them as meaning private sector bail-ins would play a greater role in future rescues.

“Cyprus is a special case,” Nowotny, who is also the head of Austria’s central bank, told reporters at a conference in Prague. “It is no model for other instances.”

Reporting by Jan Lopatka; Writing by Paul Carrel; Editing by Catherine Evans

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