The assumption of the voting rights of the ex Laiki bank (now absorbed by the Bank of Cyprus) by the European Bank of Reconstruction and Development (EBRD) would be a "good thing" for the bank and for Cyprus, Bank of Cyprus CEO John Patrick Hourican has said.
Hourican`s remarks came in response to press questions on reports that the Cypriot authorities have proposed to EBRD to assume the voting rights of Laiki Bank. Under the €10 billion bailout Cyprus received from the Troika (EC, ECB and the IMF) Laiki Bank, Cyprus` second largest bank, went into liquidation, while deposits below €100,000 as well as its assets were absorbed by Bank of Cyprus. Because these assets exceeded the €9.5 billion of ECB emergency liquidity funding (ELA) an obligation also assumed by Bank of Cyprus, it received 18% of is share capital.
The bailout stipulates that the Resolution Authority, composed of the Minister of Finance, the Central Bank Governor and the President of Securities and Exchange Commission, should transfer the voting rights to a “well-recognised and independent consulting or auditing firm or international institution.”
Press reports suggest that the Finance Minister, who is in Warasw for the EBRD annual meeting, proposed that the Bank assume the management of these voting rights.
“It brings a very reputable institution on to the island, and putting their wisdom and benefit to our use is a good thing for the bank and a good thing for Cyprus,” Hourican said.
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