Cyprus Central Bank Chief Announces Bank Reform Law: Statement

Cypriot central bank Governor Panicos Demetriades issued the following statement in Nicosia today. The text of his statement was emailed from the Cyprus President’s Office.

“The Central Bank of Cyprus has proposed the urgent submission and immediate vote by the House of Representatives of a legal framework on the reform and recovery of the Cypriot banking system. With the restructuring process, the risk of bank collapse is averted and the entirety of insured deposits, up to the amount of EU100,000, are protected. Similarly the conditions for the recovery of the banking system are created and jobs are safeguarded.

“The reform is a significant step towards achieving an agreement for financial support for the Republic of Cyprus from the European Stability Mechanism and the International Monetary Fund, at the same time as creating the conditions for the extension of the necessary liquidity for the Cypriot banking system.

“With the adoption and activation of this legal framework, reform measures will be applied to Cyprus Popular Bank (CPB) so that it is in a position to continue to extend banking services to its clients, with the reopening of banks on Tuesday. Otherwise Cyprus Popular Bank will be led to immediate bankruptcy and cession of operations, with catastrophic consequences for workers, depositors in their entirety, the banking system and the economy of the country.

To contact the reporter on this story: Maria Petrakis in Athens at mpetrakis@bloomberg.net

To contact the editor responsible for this story: Stephen Foxwell at sfoxwell@bloomberg.net

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