The House of Representatives voted Friday evening in favor of nine bills, which aim to reform and restructure Cyprus` banking sector.

The House of Representatives convened and voted on a total of nine bills prepared by the Government to armor the banking system and prevent a mass outflow of deposits.

The bills were designed as a Plan B’ by Nicosia, following the rejection by the House last Tuesday of the Eurogroup decision to impose a levy on bank deposits.

The bills provide, among others, for capital controls, in case of a capital outflow, the establishment of an Investment Solidarity Fund that would incorporate future natural gas proceeds, as well as proceeds from the issue of bonds or any other securities by any other company and any other legal person. They also grant the Central Bank of Cyprus the authority to proceed with the resolution of a financial institution. Under this bill, the CBC will act as the Resolution Authority, to safeguard the normal operation of the financial system and to safeguard the national interest.

Eurogroup reached last week an agreement in Brussels which provided for a one-off levy on savings that stung small account holders to the tune of 6.75% in exchange for a €10 billion sovereign bailout deal, whereas deposits over 100.000 euro would be charged with a 9.9% levy. The agreement also included an increase in corporate tax from 10% to 12.5%. A bill, with some modifications, was rejected by the Cyprus House of Representatives on Tuesday evening.

Excluded from the international markets, Cyprus applied last June for financial assistance from the EU bailout mechanism, after its banks sought state support following massive write downs of the Greek bond holdings amounting to €4.5 billion or 25% of the island`s GDP, as result of the Greek sovereign debt haircut