Cyprus banking sector ‘safe’

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The Cyprus banking system won’t be feeling any aftershocks from the collapse of major banks in the United States and the trouble faced by European banking giant Credit Suisse, assured the island’s central bank governor, Constantinos Herodotou.

Following the central bank chief’s first meeting with President Nikos Christodoulides, both officials said the island’s banking system is “resilient and will continue to support the real economy”.

According to a statement issued by the Presidency, the two discussed ongoing developments, in particular the situation with Credit Suisse.

Both Herodotou and Christodoulides said they were “satisfied” with how Swiss authorities have handled the matter.

The CBC governor conveyed to the president that, “Cypriot banks have a robust capital adequacy and liquidity.”

As noted in the statement, there was a common understanding that “the Cypriot banking system is resilient and able to continue supporting the real economy”.

Capital adequacy

“Cypriot banks currently have significant capital adequacy and liquidity. This is also due to the prudent policy and successful management of the various major challenges in the sector in recent years,” reads the statement.

Meanwhile, the House Finance Committee has called in banking and financial regulators for a briefing on possible risks arising from the collapse of major banks in the US.

Participants include Finance Minister Makis Keravnos, the Central Bank governor, the head of the Securities and Exchange Commission, George Theocharides, the Cyprus bank association and the institute of certified public accountants (SELK).

The meeting is slated for next week, after it was tabled by main opposition party AKEL under the title “potential fallout on the Cypriot economy from developments in the global banking system, and the need to take preventative steps.”

The Central Bank governor will also be meeting with the CEOs of the two major banks in Cyprus on Tuesday, Bank of Cyprus and Hellenic Bank.