The CB Governor reveals to “SW” as to what extent the commercial banks are responsible
The regulations over the issue of investment loans and debts to the commercial banks by politicians seems to be a utopia, as according to “SW “ information, this is completely infeasible due to the six following factors:
First, inability to track down the loans granted for the acquisition of shares, but with a different reasoning.
Second, inability to register, track down and separate investors who acquired shares using money from disposal of property, savings, pensions, as well as demand and time deposits,
Third, government’s unwillingness to guarantee amounts that exceed one billion pounds of the above categories
Fourth, danger of creating bad reputation for the Cyprus banking system worldwide
Fifth, the only category that could easily be traced and regulated are those raised under the method of margin account something opposed however from political parties.
Sixth, different dimensions of the problem for each of the banks
“It is important that a possible arrangement will not affect banks’ capital base and adequacy”, the CB Governor, Christodoulos Christodoulou, said.
On the other hand, Mr. Christodoulou pointed out that we should seriously take into consideration IMF’s position concerning CB’s responsibility to ensure that the commercial banks have adopted a sensible and secure administration of their capital base and their shareholders’ deposits. Mr. Christodoulou added that the Central Bank does not deal with loans of CYP 20-30 thousand, but loans that reach millions of pounds, which were granted to investment companies to invest in the CSE.
“Any other action would be a sign of lack of reliability worldwide. Commercial banks must apply the Bank Law”, the Governor said.
SW has managed to collect significant data concerning the two recent conventions held in the Ministry of Finance with the purpose of seeking ways to regulate loans, avoiding legal regulations. Specifically, according to the decisions of the second convention joined by Andys Trifonides, the Mps Markos Kyprianou, Demetris Syllouris, Stavros Evagorou and the General Manager of the Commercial Banks Association Andreas Hadjianastasiou: First, the commercial banks have agreed to proceed to discussions on the condition that the government and the parliament will agree on an imminent plan or formula and provide guarantees for the loans, and second, commercial banks’ are willing to contribute (to suffer losses), by deleting a number of debts. However, the government must further contribute with the rendering of guarantees.
Mr. Hadjianastasiou stressed that the plan or formula to be proposed must contain the term “investment loans”, while the inclusion of all types of loans is almost impossible. The Association, however, expects that the government will cover part of these loans, as commercial banks are not willing to suffer significant losses. “Banks are not responsible for the collapse of the CSE, but the government is”, the Association noted.
The regulations over the issue of investment loans and debts to the commercial banks by politicians seems to be a utopia, as according to “SW “ information, this is completely infeasible due to the six following factors:
First, inability to track down the loans granted for the acquisition of shares, but with a different reasoning.
Second, inability to register, track down and separate investors who acquired shares using money from disposal of property, savings, pensions, as well as demand and time deposits,
Third, government’s unwillingness to guarantee amounts that exceed one billion pounds of the above categories
Fourth, danger of creating bad reputation for the Cyprus banking system worldwide
Fifth, the only category that could easily be traced and regulated are those raised under the method of margin account something opposed however from political parties.
Sixth, different dimensions of the problem for each of the banks
“It is important that a possible arrangement will not affect banks’ capital base and adequacy”, the CB Governor, Christodoulos Christodoulou, said.
On the other hand, Mr. Christodoulou pointed out that we should seriously take into consideration IMF’s position concerning CB’s responsibility to ensure that the commercial banks have adopted a sensible and secure administration of their capital base and their shareholders’ deposits. Mr. Christodoulou added that the Central Bank does not deal with loans of CYP 20-30 thousand, but loans that reach millions of pounds, which were granted to investment companies to invest in the CSE.
“Any other action would be a sign of lack of reliability worldwide. Commercial banks must apply the Bank Law”, the Governor said.
SW has managed to collect significant data concerning the two recent conventions held in the Ministry of Finance with the purpose of seeking ways to regulate loans, avoiding legal regulations. Specifically, according to the decisions of the second convention joined by Andys Trifonides, the Mps Markos Kyprianou, Demetris Syllouris, Stavros Evagorou and the General Manager of the Commercial Banks Association Andreas Hadjianastasiou: First, the commercial banks have agreed to proceed to discussions on the condition that the government and the parliament will agree on an imminent plan or formula and provide guarantees for the loans, and second, commercial banks’ are willing to contribute (to suffer losses), by deleting a number of debts. However, the government must further contribute with the rendering of guarantees.
Mr. Hadjianastasiou stressed that the plan or formula to be proposed must contain the term “investment loans”, while the inclusion of all types of loans is almost impossible. The Association, however, expects that the government will cover part of these loans, as commercial banks are not willing to suffer significant losses. “Banks are not responsible for the collapse of the CSE, but the government is”, the Association noted.
3287.99
1275.09
