BRUSSELS - European banks climbed after Cyprus reached an overnight, last-minute deal with its international creditors on a 10 billion-euro ($13 billion) bailout.
European and Asian shares rallied on Monday at the news of the rescue bailout, with U.S. yields also rising, thus ending a week of financial panic worldwide.
In Brussels, France's Pierre Moscovici, IMF's Christine Lagarde, Germany's Wolfgang Schauble and Austria's Maria Fekter managed to reach an agreement with Cypriot President Nicos Anastasiades to dodge a collapse of the country’s banking industry – which could have seen the island become the first country to exit the European union.
“It’s been yet another hard day’s night,” European Union Economic and Monetary Affairs Commissioner Olli Rehn told reporters in Brussels early on Monday, according to Bloomberg. “There were no optimal solutions available, only hard choices.”
However, the deal leaves Cyprus in a delicate position, as the country will have to shut down its second largest bank (Laiki Bank) and inflict heavy losses on uninsured depositors – including wealthy Russians – in exchange for the bailout, Reuters reports.