The head of Cyprus’s central bank has sought to deflect blame for the chaos that has engulfed the island’s financial system but has promised a steady lifting of capital controls and played down the risk of a flight of deposits from the country once controls are suspended.

For the past 10 years, Charalambos Alexandrou was one of many Cypriots who helped build his country into a modern Mediterranean paradise. But in the last two weeks, he has watched the foundations of his country buckle under a banking collapse. The severe terms of the country’s €10 billion, or $13 billion, international bailout have tied up everyone’s cash, forced huge losses on the biggest savers and are expected to hasten a deep recession that might take years to overcome, the International Herald Tribune reported. Mr.

Big depositors at Cyprus' largest bank may be forced to accept losses of up to 60 percent, far more than initially estimated under the European rescue package to save the country from bankruptcy, officials said Saturday, the Associated Press reported. Deposits of more than 100,000 euros ($128,000) at the Bank of Cyprus will lose 37.5 percent in money that will be converted into bank shares, according to a central bank statement. In a second raid on these accounts, depositors also could lose up to 22.5 percent more, depending on what experts determine is needed to prop up the bank's reserves.

A multicolored stack of shipping containers stuffed with goods intended for Cypriot stores towered over this island nation's largest seaport—a monument to the country's financial paralysis, The Wall Street Journal reported. In normal times, thousands of tons of cargo speed through the sprawling complex here every week, feeding Cyprus's import-hungry economy. But with the country's banking system on life support, the cargo network has shuddered to a halt.

The head of South Korea's recently-launched debt restructuring fund said Sunday that it will buy debts held by financial companies just one time, shrugging off worries that repeated help could lead to moral hazards among delinquent borrowers, the Global Post reported on a Yonhap News Agency story. On Friday, the government launched the National Happiness Fund in order to buy debts held by local financial companies, a move aimed at pushing for debt write-offs or debt rescheduling for delinquent borrowers.

Cyprus’s banks reopened from a nearly two-week hiatus on Thursday with no sign of disorder among depositors, while the country’s politicians pointed fingers over who was to blame for the financial sector’s meltdown, The Wall Street Journal reported. Small groups of account-holders—typically numbering two dozen or less, and mostly retirees—pressed to enter the banks as they formally reopened at noon local time.

Russia's largest banks said Thursday their clients' exposure to losses in Cyprus so far appears modest, while there were few other signs of immediate fallout for Russian business, executives and analysts said, The Wall Street Journal reported. The Kremlin's angry public attacks last week on a planned tax on bank deposits in a tax haven long favored by Russians led many observers to suspect Russians' exposure to Cyprus's troubled banks was substantial. Estimates ran as high as €20 billion ($26 billion) in Russian money said to be at risk.

Japan’s central bank governor has told parliament that the government’s vast and growing debt is “not sustainable,” and that a loss of confidence in state finances could “have a very negative impact” on the entire economy, the Financial Times reported. The warning comes as Shinzo Abe’s administration attempts to drag Japan out of more than a decade of deflation with aggressive monetary and fiscal stimulus.

Cyprus's plan to impose capital controls threatens to test the ties that bind Europe's monetary union and could see euros on the Mediterranean island valued differently to those in the rest of the bloc, Reuters reported in an insight. The capital controls, being imposed to avert a run on banks after an EU bailout, will limit foreign transactions and capital outflows but not movements of money within the country itself, the head of the Cyprus chamber of commerce said on Wednesday after meeting government officials.

Cypriot officials gave the first indications of the steep losses facing large deposit holders at the island's two biggest lenders, as hundreds of angry bank workers staged a demonstration outside the central bank and demanded the resignation of its governor, The Wall Street Journal reported. Cyprus's central bank chief said Tuesday that large depositors at the island's biggest lender, Bank of Cyprus Pcl, could lose as much as 40% on their deposits.