Piraeus Bank of Greece was chosen to manage the Greek branches of Cypriot lending institutions. This would help shiled Greek banks from the crisis enveloping Cyprus and at the same time allow Cyprus to gain control over its bloated banking sector.

The deal was formalized through an announcement by the Greek bank bailout fund but execution would still be subject to EU regulatory review. This caused a rise in Pireaus bank share values by 20% after the news was broken by Reuters. 

Piraeus bested Alpha Bank to be stewards over the biggest lenders from Cyprus operating in Greece, namely the Bank of Cyprus and the Cyprus Popular Bank. This was allowed after the two countries agreed that the ailing units would be sold to Greek financial institution while Cyprus tries to negotiate a bailout deal to prevent the collapse of its financial system.

The bailout plan should have been in place as early as last week had it not been for a Cyprus veto of a provision in the bailout agreement for an unpopular bank levy imposition.