The decree, which has immediate effect, notes that additional resolution measures may be taken if deemed necessary.
Although the bank is solvent, it's understood that its operations have been dealt a serious blow after US and German financial institutions stopped transacting with it, in the wake of the money laundering allegations. Had the bank's branch here declared bankruptcy, the Cypriot state – itself broke – might then have found itself having to backstop the bank's insured deposits (up to €100,000).
Placing the bank under resolution would pre-empt that, sources explained.
FBME was placed under the administration of the CBC last week, hot on the heels of a US Treasury report implicating the lender in money laundering.
In a statement earlier on Monday, FBME said CBC staff "have been present at FBME Cyprus since the afternoon of
It added: "FBME is working with the CBC to address the current situation and to reassure the market that FBME continues to act in accordance with current regulations."
The CBC took over the operations of the Lebanese-owned
Asked by the Mail,
They declined to comment on whether the US Treasury's allegations have been substantiated to any degree.
"Obviously, the current arrangement [FBME administration by the
Last Thursday the US Treasury accused FBME, which though chartered in
The Mail moreover understands that US authorities first became 'interested' in FBME at least two years ago; during this time the Americans had been at work gathering hard data on the lender.
FBME was originally established in
The US Treasury report, dated
"FBME was involved in at least 4,500 suspicious wire transfers through U.S. correspondent accounts that totalled at least
The findings open the process to institute special measures against the bank and all of its subsidiaries.
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