01THE HOUR
09:00
Saturday, March 16, 2013. Nicosia.
Before dawn in Brussels, Eurogroup finance ministers announced a rescue package for Cyprus that included a one-time levy on all bank deposits held on the island: 9.9 percent above one hundred thousand euros and 6.75 percent below. In Nicosia it was still Saturday morning. Commercial branches were shut for the weekend anyway. Electronic transfers between banks had already been stopped by the authorities. The cash machines still worked.
02THE SEQUENCE
Sat 16
March
The plan was announced overnight. Cypriot officials shut down electronic transfers to prevent electronic runs. Cooperative banks, typically open on Saturdays, were open for part of the morning and then closed as depositors emptied ATMs and ran on them.
Tue 19
March
Parliament rejected the deposit levy by 36 votes against, none in favour, 19 abstentions. The banks stayed shut anyway, under a holiday that was extended repeatedly.
Wed 20
March
Reporting described a shift to cash for everyday transactions. Some petrol stations closed their credit card facilities, and many stores were refusing cheques. Domestic suppliers extended credit; overseas suppliers had less tolerance.
Sun 24
13:00
The Central Bank of Cyprus imposed a daily ATM withdrawal limit of 100 euros at the two largest banks, Bank of Cyprus and Laiki. Laiki had already cut its own limit to 260 euros earlier in the week.
Thu 28
March
Banks reopened for six hours, twelve days after the announcement. A decree capped daily cash withdrawals at 300 euros per depositor per institution. Cheques could not be cashed. The 300 euro limit was abolished by decree one year later, on March 28, 2014.
03THE HIDDEN DEPENDENCY
Card acceptance at merchants weakened during the closure while the card network itself continued to operate. Reporting from Nicosia described handwritten cash-only signs at retail stores and coffee shops, and the Gas Stations Association issued a statement that 260 of 280 stations were still accepting credit cards, in response to complaints that stations were insisting on cash.
A functioning network is not the same as a functioning payment.
04WHAT STILL WORKED
ATM CASH
Dispensing continued through the closure at working machines, on limits, with reporting describing machines that emptied and had to be refilled.
CARD NETWORKS
Continued to operate for the merchants that accepted them. The constraint was acceptance, not the rails.
SUPPLIER CREDIT
Cypriot businesses were reported willing to extend credit or delay payments between parties who knew each other. Overseas suppliers were not.
05THIS WEEK, THEN
FROM THE RECORD
March 24, 2013, 13:00
The Central Bank of Cyprus imposed a 100 euro daily ATM withdrawal limit at Bank of Cyprus and Laiki. Cyprus Popular Bank had cut its own limit to 260 euros earlier in the same week. Bank branches remained closed. They would remain closed for four more days.
06THE PATTERN LIBRARY
1.
Electronic interbank transfers can be stopped by administrative action while ATM cash dispensing continues and card networks remain live.
Observed: Cyprus 2013.
2.
ATM service can remain available during a bank closure while per-account daily limits and cash depletion at individual machines constrain what a depositor can withdraw.
Observed: Cyprus 2013.
3.
Merchant acceptance of cards can weaken faster than the card network itself during a banking closure.
Observed: Cyprus 2013.
CHANGED TODAY: first issue. Five entries added, each carrying a single case from Cyprus 2013. The full library travels at the foot of every issue.