Thorsten Beck, 22 March 2013

Cypriot banks urgently need restructuring and downsizing, but a functioning financial system is necessary to handle Cyprus’s transformation to an economic model not based on an oversized banking sector. This column argues that splitting the Cypriot banking system into a bad ‘legacy’ part and a good forward-looking part seems the only feasible and effective solution to resolve the current crisis and restore trust. The Eurozone's resources would be most useful in this bank-resolution process.

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