US investment consultant firm Pimco will deliver today its final report on the due diligence review of the Cypriot financial sector.
Pimco was commissioned to carry out a due diligence review of the Cypriot financial sector and determine the capital needs of the financial institutions as part of Cyprus’ application for financial assistance from the European Stability Mechanism.
The report will be examined by the Steering Committee composed of representatives of the Cyprus Finance Ministry and the Central Bank, the European Commission, the European Central Bank, the European Banking Authority, the ESM and the IMF as an observer.
Sources told CNA the report will be delivered with the close of business in Pimco’s headquarters in California. The Steering Committee will then take into account the mitigating actions that have been made by the Cypriot financial institutions. So far press reports suggest that Pimco estimates that the capital needs of the Cypriot banking sector will reach 10 billion euro in the adverse scenario, which in turn means that the Cypriot financial assistance package will reach 17.5 billion roughly equivalent to the island’s GDP. The memorandum agreed in principle between the Troika (EC, ECB and IMF) and the Cypriot Authorities, provides for a bank support facility up to 10 billion euro.
After their meeting on January 21, the Euro area Finance Ministers (Eurogroup) announced that the capital needs of the Cypriot banking sector will be announced after the agreement of the financial assistance programme scheduled for March.
Get all the latest news and videos in your inbox. Register FREE