Bank boss: Cyprus will need bailout

Cyprus will have to seek bailout funds from the European Union to recapitalise a banking sector pummelled by exposure to Greek debt and must prepare by taking tough steps to shore up its finances, the chairman of the country's second-largest lender has said.

The comments by Cyprus Popular Bank's Michalis Sarris further bolster a growing sense that the island will be the next in line to ask for help from the European Financial Stability Facility. Other top Cypriot officials also have recently left the door to a bailout open.