IMF says Central Bank of Cyprus supervise Cooperatives

A delegation of the International Monetary Fund (IMF) is currently in Cyprus to discuss the supervisory authorities’ system of the island has suggested that the Central Bank of Cyprus could be the independent body, which could supervise cooperative credit institutions.
House of Representatives Committee's Chairwoman on Financial and Budgetary Affairs Antigoni Papadopoulou said that the members of the Committee informed the IMF delegation that the Central Bank of Cyprus is responsible to supervise banks, while the Cooperative Central Bank exercises control over the cooperative banks.
During the meeting, she said, they discussed whether there should be a separate supervisory authority for the cooperative institutions since they are currently being supervised by two bodies, as well as whether there should be one central supervisory body.
Papadopoulou expressed the view that the supervisory authorities in Cyprus are doing a good job and that there is no urgent need to change the existing system, “unless a broad dialogue begins and we are convinced of such a necessity”, she said.
She explained that the IMF’s visit to Cyprus is held in the context of a series of visits, which IMF technocrats are paying to various countries, in order to get informed about their supervisory systems.
“The basic questions they ask, is whether the structure of the supervisory system of each country they visit is satisfactory or whether there are any problems, and which steps each country is thinking of taking towards improving the system”, she said.
She added that Cyprus’ national legislation has been fully harmonized with the EU norms and regulations.
Moreover, she said that the Ministry of Finance has established an ad hoc committee to consult with other EU countries in order to study the various practices and supervisory systems, which exist and then proceed with some recommendations.
The Central Bank of Cyprus was established in 1963, shortly after Cyprus gained its independence, as an autonomous institution. Today the Bank is governed by the Central Bank of Cyprus Laws 2002-2007, which ensure the Bank’s independence as well as compatibility with the relevant provisions of the Treaty establishing the European Community and the Statute of the European System of Central Banks and of the European Central Bank.
The main functions of the Central Bank include: implementing the European Central Bank’s monetary policy decisions; holding and managing the official international reserves; supervising banks; promoting, regulating and overseeing the smooth operation of payment and settlement systems; safeguarding the stability of the financial system.
On 1 January 2008, Cyprus joined the euro area thus bringing to fruition the island’s goal of becoming a fully integrated member of the EU.