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updated: 3/26/2013 8:41 AM

Top E.U. official: Cyprus bank rescue new template

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  • Dutch Finance Minister and chief of the eurogroup Jeroen Dijsselbloeman chairs an emergency eurogroup meeting Sunday in Brussels. After failing for a week to find a solution at home to a crisis that could force it into bankruptcy, Cypriot politicians were turning to the European Union on Sunday in a last-ditch effort to help the island nation forge a viable plan to secure an international bailout.

      Dutch Finance Minister and chief of the eurogroup Jeroen Dijsselbloeman chairs an emergency eurogroup meeting Sunday in Brussels. After failing for a week to find a solution at home to a crisis that could force it into bankruptcy, Cypriot politicians were turning to the European Union on Sunday in a last-ditch effort to help the island nation forge a viable plan to secure an international bailout.
    Associated Press

 
Associated Press

BRUSSELS -- A top European official says the move in Cyprus to inflict losses on banks' shareholders, bondholders and even owners of large deposits should become the bloc's default approach for dealing with ailing lenders.

Jeroen Dijsselbloem, who chairs the Eurogroup gatherings of the 17 eurozone finance ministers, said in an interview Monday banks' owners and investors must be held responsible "before looking at public money or any other instrument coming from the public side."

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The Eurogroup earlier Monday granted Cyprus a 10 billion euro ($13 billion) bailout that foresees dissolving a large bank, wiping out its bondholders and inflicting significant losses on deposits larger than 100,000 euros. EU officials had said that was a "unique step."

Dijsselbloem's office confirmed the remarks made in an interview with the Financial Times and Reuters.

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