articles | 13 August 2014

Central Bank Governor urges MPs to approve foreclosures bill

f the bill on the foreclosures on mortgaged properties is not approved, the value of mortgaged loans of systemic banks of Cyprus will be zero during the stress tests, says Central Bank of Cyprus (CBC) Governor Chrystalla Georghadji.

She was speaking before the joint meeting of the Parliamentary Committees on Finance and Interior, which continues the discussion on the foreclosures bill.

Responding to questions from MPs during the discussion on the bill, the Governor said that personal guarantees on loans are not taken into account during Stress Tests, adding that Cyprus will ask for a one off adjustment.

The Governor said that "we are working on a bill on abusive provisions” by the banks.

She further said that when the stress tests are completed, the Central Bank will focus on restructuring and interest rates.

Georghadji explained to the House that before the definition of non-performing loans was changed a year ago, there were no non-performing loans because they had sufficient collateral.

She also said that loans amounted to €52.5 billion in total, adding that €10 billion have housing as collateral, of which €4 billion are not served.

The CBC Governor said the non-performing accounts restructured in the first quarter of 2014 were 6.789, corresponding to €1.2 billion.

She stressed that there should be no forced restructuring of loans.

Parliamentary parties, except the ruling Democratic Rally, said on Monday that the foreclosures bill will not be approved as it is and asked the Government to renegotiate with the Troika of international lenders.

Cyprus’ lenders want the bill approved before the next Eurogroup meeting in mid September.

Source: Famagusta Gazette

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