CYPRUS: Insolvency chief says business, borrowers not using right tools

The head of the independent Insolvency Service, Yiorgos Karotsakis and Troika representatives (IMF, European Commission, ECB) reviewed the progress so far in the implementation of the insolvency framework , within the framework of the third post-surveillance mission in Cyprus.

Karotsakis was quoted by the Cyprus News Agency as saying that he briefed the Troika officials on how the tools of the insolvency framework work and the results so far.

The Troika was also informed on the difficulties in the implementation, while Karotsakis emphasised the need to improve the effectiveness of these tools and their use by businesses and borrowers. They also discussed ways for borrowers to further use the tools provided by the law.

Karotsakis also briefed the Troika on the programmes running in connection with the establishment of the Insolvency Framework Assessment Committee by the Ministry of Energy and how this is progressing. They also discussed the training of insolvency advisers and the regulation of their profession.

The international lenders also wanted to find out why lenders do not utilise the insolvency framework to restructure their loans. According to Karotsakis the cost, the lack of information and the direct arrangement of the loans with the creditors, are some of the reasons.