The accepted practice in bank accounting is to set up significant loan-loss reserves only when the commitment is availed of and the arrangement becomes an on-balance-sheet loan.

FORBES: Timebombs in the Vault

Some investors fear that Cyprus will never be able to repay its debt, and many question its commitment to fighting money laundering and its strong links to Russia, which extended a 2.5bn-euro loan in late 2011.

BBC: Cyprus votes for new president amid economic crisis