Stavrakis: Cyprus not affected by world financial crisis

The banking and the financial system of Cyprus is sound and robust and faces no danger from the international financial crisis, Finance Minister Charilaos Stavrakis said.
Stavrakis chaired a meeting with local financial regulatory authorities, in a bid to assess the size of Cypriot direct investments in the high-risk investment products, which seem responsible for the global financial crisis.
Speaking to the press after the meeting, Stavrakis said that Cypriot investments were limited since banks had invested 15 mln euro in high risk investment products and another 2 mln euro were invested by stockbroker offices.
''There is no danger and no reason for concern as far as our financial system is concerned, which remains robust and strong and is minimally affected by the phenomena shaking the world economy,'' Stavrakis added.
The Finance Minister also said that more meetings will follow to assess whether the international financial crisis will affect Cyprus’ economy and namely, the rate of growth, inflation and employment.
The 2009 state budget forecasts growth rate of 3.7% of GDP, inflation possibly lower than 3%. ''The Cypriot economy continues to show encouraging signs and our aim is to maintain them in the best possible way,'' Stavrakis said.
Furthermore, Stavrakis said that no assessment has been made so far regarding investments made by Cypriot pension funds, which are under the authority of the Ministry of Labour and Social Insurance.
''It seems that there were some investments in high-risk investment products which will sustain losses,'' Stavrakis said, adding that the Labour Ministry will assess the extent of the investments made.
Stavrakis reiterated that the investment of pension funds should be cautious and conservative, noting that he will discuss this issue with the social partners with a view to creating a policy that will not endanger the taxpayers' pensions.
The CyBC state channel reported that the provident fund of CYTA had invested money in funds backed by Lehman Brothers, but the level of losses were not clear.