Cyprus President Building Case to Dismiss Central Bank Governor

Cypriot President Nicos Anastasiades said he’s considering asking the country’s Supreme Court to remove central bank governor Panicos Demetriades from his post because he’s not doing a good enough job.

“I have to say that I’m examining and documenting all the things that make up his shortcomings or lack of adequacy in the execution of his responsibilities,” Anastasiades said in an interview on Mega TV late yesterday. “I will decide accordingly, in line with the constitution, if the matter can be referred to the Supreme Court.”

Tension between the two men has been a feature of Cyprus’s financial crisis, particularly over the handling of capital controls, which Anastasiades told Bloomberg News this week had to be lifted by January. The country agreed to a 10 billion-euro ($13.6 billion) bailout in March that involved imposing losses on uninsured depositors at Bank of Cyprus Pcl and Cyprus Popular Bank Pcl, the country’s two biggest lenders.

Anastasiades said yesterday his “patience has its limits” and he was frustrated with Demetriades’s delay in approving Bank of Cyprus (BOC)’s new board members. The central bank governor spends too much time outside the Cyprus and “the country’s needs can’t depend on anyone’s whims,” he said on Mega TV.

“It’s sad to note the attempt, with the president’s statement today, to undermine the institutional independence of the central bank governorship,” Aliki Stylianou, Central Bank of Cyprus spokeswoman, said in an e-mailed statement yesterday. “The assessment of the capability of Bank of Cyprus’s new board of directors is a very important supervisory responsibility of the central bank. The evaluation is done carefully, and based on the European Banking Authority’s criteria, to protect Bank of Cyprus’s credibility and avoid repeating mistakes of the past.”

To contact the reporter on this story: Georgios Georgiou in Athens at ggeorgiou5@bloomberg.net

To contact the editor responsible for this story: Maria Petrakis at mpetrakis@bloomberg.net

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