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Orphanides told Cypriot lawmakers that the decision to write down Greek debt was wrong and a "tragic" mistake which led to spikes in bond yields of sovereign debt throughout the eurozone.
"It was a terrible mistake", Orphanides, who is also the governor of the Central Bank of Cyprus, told parliament's Finance Committee. "By forcing the impairment of any state bond we have triggered concern internationally of all state bonds in the eurozone and that's one of the key reasons we have a problem", he said. "It is because of this tragic mistake in the eurozone that the yields of so many bonds are so high", Orphanides added.
Cypriot banks have considerable holdings in Greek debt. Last week they announced considerable losses on the Greek writedown.