The decision to buy Greek bonds at that time was correct, Efthimios Bouloutas stated on Thursday, stressing that the Board of Directors was aware of the decisions and rejecting what it was said at today’s CPB meeting on ignorance.
Mr. Bouloutas says that the bank’s exposure to bonds was registered in its accounts and special references were made to it in at least two Board meetings in 2010.
“No-one could have predicted the haircut and only in Cyprus there is a debate about alleged responsibilities”, he noted.
With respect to the statements of Mr. Sarris and Mr. Stylianides at a press conference that the competent leaders of the bank had not been informed on the exposure to Greek bonds and that even when the Central Bank warned against taking risk in March 2010, the Bank's management was not informed, I would like to restore the truth”, former CEO of the bank said.
1. The positions of the bank in bonds are detailed in the financial statements approved quarterly by the Board of the Bank under the title of Government Titles and Treasury Bills, Bonds in paragraphs Bonds Available for Sale held to Maturity. The approval of financial statements by the Board follows the positive recommendation of the House Audit Committee and the external auditors. Thus, there was a complete and continuous updating of the Board on the exposure to bonds.
2. In addition, detailed reports in Greek government bonds took place periodically in the Board and certain references were made to the Board of Directors of the bank on 9/2/2010 during which the bank's strategy regarding the exposure to Greek bonds unanimously approved. At the same time, the Board of Directors held on 22/6/2010 presented the results of the stress tests of euro area banks which were requested by the CEBS (Committee of European Banking Supervisors), with detailed reference to all government securities of the bank. It is worth noting that the CEBS demanded the use of risk weighting for Greek bonds between 2.35% and 3.18%. (Possible loss in the event of default)
3. Regarding the letter from the Central Bank of Cyprus, this was addressed to Cypriot Deputy CEO, who was immediately forwarded it to the Internal Audit Department, the Finance Department, the Risk Management Department and the Capital Markets Department. The competent departments of the Bank - in accordance with standard practice - cooperated in their official response, signed by the recipient himself. Obviously, everybody was aware of both the letter and the answer.
“Therefore, what was stated by Messrs. Sarris and Stylianides at the press conference lacks seriousness”, he said.
“If some are interested in learning the truth, the collective decision of the bank for the purchase of Greek bonds at that time was correct. No one could have predicted in the middle of 2011 that certain talks on haircut could be launched." That is the reason why no Greek or European bank has been ever accused for its investment in Greek bonds and discussions on the alleged responsibility are made in Cyprus only”, he said.
“My allegations are documented but unfortunately because of the commitment of confidentiality I can not publish them. I am willing to deliver them to the Central Bank of Cyprus though”, he concluded.
Mr. Bouloutas says that the bank’s exposure to bonds was registered in its accounts and special references were made to it in at least two Board meetings in 2010.
“No-one could have predicted the haircut and only in Cyprus there is a debate about alleged responsibilities”, he noted.
With respect to the statements of Mr. Sarris and Mr. Stylianides at a press conference that the competent leaders of the bank had not been informed on the exposure to Greek bonds and that even when the Central Bank warned against taking risk in March 2010, the Bank's management was not informed, I would like to restore the truth”, former CEO of the bank said.
1. The positions of the bank in bonds are detailed in the financial statements approved quarterly by the Board of the Bank under the title of Government Titles and Treasury Bills, Bonds in paragraphs Bonds Available for Sale held to Maturity. The approval of financial statements by the Board follows the positive recommendation of the House Audit Committee and the external auditors. Thus, there was a complete and continuous updating of the Board on the exposure to bonds.
2. In addition, detailed reports in Greek government bonds took place periodically in the Board and certain references were made to the Board of Directors of the bank on 9/2/2010 during which the bank's strategy regarding the exposure to Greek bonds unanimously approved. At the same time, the Board of Directors held on 22/6/2010 presented the results of the stress tests of euro area banks which were requested by the CEBS (Committee of European Banking Supervisors), with detailed reference to all government securities of the bank. It is worth noting that the CEBS demanded the use of risk weighting for Greek bonds between 2.35% and 3.18%. (Possible loss in the event of default)
3. Regarding the letter from the Central Bank of Cyprus, this was addressed to Cypriot Deputy CEO, who was immediately forwarded it to the Internal Audit Department, the Finance Department, the Risk Management Department and the Capital Markets Department. The competent departments of the Bank - in accordance with standard practice - cooperated in their official response, signed by the recipient himself. Obviously, everybody was aware of both the letter and the answer.
“Therefore, what was stated by Messrs. Sarris and Stylianides at the press conference lacks seriousness”, he said.
“If some are interested in learning the truth, the collective decision of the bank for the purchase of Greek bonds at that time was correct. No one could have predicted in the middle of 2011 that certain talks on haircut could be launched." That is the reason why no Greek or European bank has been ever accused for its investment in Greek bonds and discussions on the alleged responsibility are made in Cyprus only”, he said.
“My allegations are documented but unfortunately because of the commitment of confidentiality I can not publish them. I am willing to deliver them to the Central Bank of Cyprus though”, he concluded.
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