ANOTHER REPORT: Cyprus Will Shut Down Laiki, Split It Into 'Good' And 'Bad' Banks

michelle caruso-cabreraBloomberg is reporting via CYBC, the state-run broadcaster in Cyprus, that Cyprus Popular (a.k.a. Laiki) – the country's second-largest lender and arguably its most afflicted bank – will be shut down.

The plan will follow the "good bank/bad bank" format.

Assets from the "good bank" will be sold, and the proceeds of the sale will be returned to depositors.

Bank deposits of less than 100,000 euros are guaranteed, reports Bloomberg.

However, according to Bloomberg, the Cyprus Central Bank denied the initial reports, saying it hand't been informed of or taken such a decision. It also said it was trying to find the best solution for Laiki, and that a reorganization of the bank is not the same as a closure.

The chart below, via Exotix economist Gabriel Sterne, shows the extent of Laiki's problems, even before this weekend's bailout deal and ensuing chaos hit.

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