“Changes in the legislative framework and probably also the constitution will be needed” to modernise the central bank’s governance, Georghadji was quoted as saying by the Cyprus News Agency.

Georghadji, who was addressing delegates at a conference in Nicosia and was responding to comments made earlier by Finance Minister Harris Georghiades, said that the central bank is proceeding “at a fast pace towards a new Central Bank” following the preparation of a report by a foreign consultancy group.

“It was completed some time ago, the government has been informed (and) the first phase of the central bank reorganisation report has gone on,” she was quoted as saying.

The Finance Minister, who was also a keynote speaker at the event, said that the modernisation of the structure, operation, and governance of the central bank are some of the government’s priorities for the near future.

“This may have been one of the gravest omissions of the Adjustment Programme, but even now, these necessary reforms can and have to be put forward on an initiative of the central bank,” Georgiades said, according to the emailed transcript of his speech.

In February 2015, the Central Bank of Cyprus said that its board of director decided to initiate an internal reform at the bank supervisor as a result of the shortcomings in its structure and governance revealed by the 2013 banking crisis, which caused depositors at Bank of Cyprus and Cyprus Popular Bank, also known as Laiki, to lose €8bn.

In September, the Central Bank of Cyprus said that it was proceeding based on the recommendations included in a report prepared by Roland Berger GmbH, the German consultants appointed to assist, and that it was expecting that the bulk of the reform would be completed by the end of 2016.

Georghadji added that the IMF “has offered technical assistance concerning matters of governance as it has experience with what happens in other European and developed countries”.

Source: Cyprus Mail