Traders in Cyprus would welcome letters of credit (L/Cs) provided by Lebanese banks according to media reports.

Lebanese bankers reportedly told the Daily Star that the traders wanted such L/Cs to help them trade with Europe.

L/C availability

The availability of L/Cs and the range of other financial services from Cypriot banks have diminished in the wake of the country's 2012-13 financial crisis.

A liquidity crunch following an international bailout in March 2013 closed down one major bank and imposed losses on large depositors in another.

Response

Lebanon and Cyprus have responded to the situation by forming a joint banking committee to strengthen financial ties between the two countries, according to a statement released by Lebanon's central bank.

A Lebanese banking delegation visited Cyprus earlier this month in a bid to expand the operations of its financial institutions on the island as it seeks to maintain international trade links.

The delegation focused on establishing a framework for cooperation between the two countries' banking sectors and international banks operating in Cyprus.

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