Cyprus has EUR2 bln to support banks

Cyprus can easily and immediately make available up to EUR 2 bln in emergency funds to support the island’s banking system, if there is such a need, even though Finance Minister Charilaos Stavrakis insists that the banking system here is safe.
“Having reduced public debt from 60% of GDP to 48% or by 10 basis points from the total of EUR 17 bln, we have available the amount of EUR 1.7 bln, which can and will be used in case of an emergency,” said Stavrakis.
The Cyprus government also has about EUR 200 mln with commercial banks and access to additional funds that may drawn upon.
Stavrakis was speaking after his second meeting with top financial, economic and business as well as public and other governmental agencies to come up with a credible plan to meet any negative affects from the global credit crunch.
“There are no major losses or exposure to toxic assets and I repeat, the Cyprus banking system is safe, enjoying ample liquidity and high capital adequacy ratio, but nevertheless, we have to be ready,” said Stavrakis, who being a former banker himself, knows how to brace for crisis.
The Finance Minister however, said that there will be a negative effect on the Cyprus economy, which is reliant on tourism and foreign investments.
Referring to his contacts in Russia and his meeting in Moscow with his Russian counterpart, Stavrakis said that no capital has moved out of Cyprus in direct relation to the financial crisis that affected Russian capital markets.