BRRD - The Cyprus position

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In early 2013 the Cyprus banking sector was in severe difficulties. As a result of the disproportionately large banking sector, Cyprus was facing a major economic crisis. Laiki bank, the second largest bank in Cyprus, was on the verge of bankruptcy, a factor which would inevitably have led to the collapse of the Cyprus economy if no steps were taken. At the time, there was no concrete banking resolution infrastructure or regulation in Cyprus to assist in such a dire situation. The Parliament convened an emergency session on 22 March 2013 lasting just two days and passed the Resolution of Credit and Other Institutions Law (17(I)/2013)(the Resolution Law) in order to facilitate the restoration of the viability of the financial sector in Cyprus and to satisfy the criteria imposed by the Eurogroup as a condition to the €10 billion bailout to the Cyprus economy.