Marfin Laiki CEO sees Cyprus ‘losing out’ with covered bonds delay to 2011

A leading banker believes that the Cyprus banking system is losing out big time because of the delays to pass a long overdue law on covered bonds.
Marfin Laiki Bank’s CEO Efthymios Bouloutas told a press briefing on Thursday that he doesn’t see the legislation introducing the instrument being passed by parliament this year.
“Cyprus did not have covered bonds two years ago, and it still does not have them now. It should move faster,” Bouloutas said, while discussing the present and future prospects of the bank and the economies of Cyprus and Greece.
“If Cyprus had covered bonds then the cost of new loans would fall drastically, as the [Cyprus] banking system can raise about 6-8 bln euros very quickly, in about 6 to 12 months after the legislation is passed,” he said.
As an example, Bouloutas said that the group subsidiary Marfin Egnatia Bank had raised EUR 500 mln in Greece from a second series covered bond just two days ago.
Asked to comment on media reports that the Cyprus legislation on covered bonds is seen as being tabled in autumn, Marfin Laiki’s CEO replied bluntly: “I’m afraid we will not see approval of the bill until after the European Central Bank has considered a rate hike, and definitely not in September.”