Central Bank: situation in banking sector creates confusion

Cyprus Central Bank Governor Christodoulos Christodoulou said here today that the situation in the banking sector ”creates confusion in a very sensitive sector of our fiscal system.”
His comments come after a public offer by Greek Piraeus Bank to acquire a minimum 40 percent of Marfin Popular Bank and Marfin’s announced intention to make a public offer to the shareholders of the Bank of Cyprus to acquire up to 100 percent and at least 35 percent of its issued share capital.
Marfin Popular Bank announced today its decision to make a public offer to the shareholders of the Bank of Cyprus to acquire up to 100 percent and at least 35 percent of its issued share capital, one day after Greek Piraeus Bank said it would make an offer to acquire a minimum 40 percent of Marfin Popular Bank.
Following this development, a legal dispute has emerged as to which of the two offers is actually legally valid.
”I am not happy with the legal dispute that has arisen as to which of the two proposals is valid,”, Christodoulou said, adding that this issue will be decided by the Cyprus Stock Exchange with the agreement of the Cyprus Securities and Exchange Commission.
Replying to questions, after a meeting of the Cyprus Monetary Policy Committee, Christodoulou said that the whole situation ”creates confusion in a very sensitive sector of our fiscal system.”
‘We are witnessing full liberalisation of the financial sector and this I believe is irreversible,” Christodoulou said, adding ”the rules governing mergers and acquisitions are not related to limitations and national protectionism, which have been abolished.”
He pointed out however that what is important is that new organizations, emerging after a merger or an acquisition, should be viable and must be able to cope up with competition.
Christodoulou said that he will examine Marfin’s proposal ”with utmost impartiality” when a request is submitted to the Central Bank by Marfin.