The Economic Policy Council will convene May 31 to study the research carried out by a special group of the Council on the banking system of Cyprus.
President of the Council, Nobel laureate Christoforos Pissarides said on Saturday that when the Council members conclude the study on the research they would send it to the President of the Republic and the Minister of Finance and later on it will be given to party leaders.
The Council, Pissarides said, will prepare a number of researches and studies on various sectors of the economy aiming to come to conclusions as to which financial model they could recommend Cyprus to adopt.
The studies are being carried out be the groups the Council has established.
“The first sector under study is the banking sector,” Pissarides said describing the need to examine it as urgent and pointing out that the sector is under examination by Central Bank from a different perspective.
He also referred to the capital restrictions imposed in March, after the Eurogroup agreement on Cyprus bailout programme, pointing out the need to ease them. The research of the Council is however not focusing only on the restrictions, Pissarides said.
“We will examine all aspects, the system’s structure, its size and whatever is related to the economy,” he said.
Pissarides set as top priorities the termination of the feeling of uncertainty regarding bank deposits and the resumption of lending to companies to facilitate investments thus creating new job positions.
He also expressed hope the Council would succeed in making a new planning of the economy.
Invited to comment on the Troika demand to downsize the banking sector and asked whether the resolution of Laiki Bank and the fact that part of it is being absorbed by Bank of Cyprus, would lead to the increase of the Bank’s size, Pissarides pointed out that Cyprus’ banking sector has already been reduced. This was achieve by selling oversees banks, he said also stressing that the main thing is to reduce the sector`s GDP percentage enabling thus the Government to recapitalize the banks by own means if needed.
