articles | 28 February 2013

Central Bank of Cyprus Governor in London to spur investment into banking sector

Governor of the Central Bank of Cyprus Panicos Demetriades is reported to be in London for meetings with people who could be interested in investing in Cyprus’ banking sector.

Citing reliable sources, the Cyprus News Agency said that while in London Demetriades will have talks with potential investors willing to take a stake in Cypriot banks, which have suffered a heavy blow following the Greek sovereign debt write-down in October 2011. Excluded from international markets, Cyprus requested financial assistance after its two largest banks sought state aid following massive write-downs of the Greek bond holdings estimated at €4.5 billion. 

Cypriot authorities and international lenders have agreed in principle on a Memorandum of Understanding containing the terms of the financial assistance programme estimated at €17.5 billion, which is equal to the country`s GDP. In the context of the Cypriot application, the authorities commissioned a US investment consultancy firm to carry out a due diligence review of the Cypriot financial sector. PIMCO delivered its final report containing the capital needs on the basis of a baseline and an adverse scenario on February 2.

A reliable source has told CNA that the capital shortfall of the financial institutions which were included in the review reaches €5.98 billion in the baseline scenario, whereas the shortfall in the adverse scenario rises to €8.66 billion.

Source: Cyprus Mail


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