Latest Headlines

Banking system comes under scrutiny

The promotion of foreign currency loans without advising borrowers of the currency risks is one of the topics being investigated by the House Institutions Committee as it scrutinises the functioning of the banking system.

THE functioning of the institutions in the banking system is under the microscope of the House Institutions Committee.

The members of the Committee will discuss the promotion of loans in foreign currency without informing borrowers on the currency risks and the loans granted to senior executives of banks with bonus rates, according to allegations.

They will also discuss the extension of the branch network of banks in Greece, the high salaries and bonuses of senior bank executives during 2007 – 2012 and the privileged deletion of loan from financial institutions to organizations and companies connected with party and political persons and senior government officials.

The capital securities were discussed for a few minutes, after the letter sent by the Central Bank of Cyprus to the Parliament.

Given that the investigation is in progress, according to the letter, it would not be appropriate to reveal the positions of Cyprus Popular Bank and Bank of Cyprus on the issue.

Chairman of the Committee and EVROKO, Demetris Syllouris expressed the hope that the delay will not act as camouflage.

Chairman of the Capital Securities Association, Phoebus Mavrovouniotis said that they expected that the initial findings of the Central Bank would be a tool to convince the Troika that capital security holders were misled.

The legal adviser of the Association noted that the initial findings of the Central Bank ensure that there were irregularities, but we will expect the final outcome.

With regard to the general issue of the banks, the Chairman of the Commission, citing a letter from the Privacy Commissioner, noted that the disclosure of personal data in the parliament, ie disclosure of names, is permitted.

SEC Chairwoman, Demetra Kalogirou said that SEC’s report on Bank of Cyprus will be ready at the end of the year.

Specifically, it is investigated whether there were misleading statements to the public and misleading information was given to invest in securities.

For Cyprus Popular Bank, the investigation will begin in 2013.

Representative of the Central Bank noted that Pimco report also covering sponsorships with associated persons with the banks will be ready in mid-January.

He also stressed that the due diligence by Alvarez & Marsal will demonstrate how banks were led to the current state, while part of it will cover the extension of branches in Greece.

“As for the loans in foreign currencies, the Central Bank sent a circular in 2006 on the risks”, the representative said.

The MPs raised a number of questions, asking for the submission of data and the publication of names.

Readers' comments

Comments on this article are no longer being accepted.

  • Martyn says:

    In most countries something as seemingly comprehensive as this would be very welcome.

    In Cyprus it seems everybody who understands the importance of all this just ‘knows’ there are going to be huge slices of Fudge, all served up, probably, under the usual ‘smoke and mirrors’ techniques.

  • Costas Apacket says:

    It would appear that you can’t polish the Cypriot Justice System either?

  • Adrian says:

    I can’t wait to see how big a cover up can be. The rule is follow the money, in which case the investigation should be held in Switzerland because the money is long gone from Cyprus.

  • andyp says:

    I remember sitting through hours of my CBA hearing against a certain Cyprus Lawyer and all the seemingly supportive, inquisitive and relevant questions from the 6 panel members.

    In the end I “won” the case. But when the verdict starts with in light of the sterling service to the law which this well known (previously jailed) excuse for a lawyer comes out you know you are on a hiding to nothing. 1000 euro fine!

    They talk a good game but they do nothing in reality.

    Anyone who has been taken in by this mortgage do not think for one moment that you are saved. In my experience they will spend more time trying to figure out how to protect the guilty. And they do.

    In the words of the famous Paul Calf “Bag of sh**e”

    I stand to be corrected and hope I am.

  • Alexey Golovanov says:

    The scrutiny of mere scholastic interest, since more than enough time was available to divert the funds, to collect the cash, to resign with golden handshakes, and to destroy (or at least to tamper with) the evidence.

  • Pete says:

    I wonder if they could be persuaded to investigate how someone can stand as guarantor of a developer loan whilst claiming he had no collateral and why further loans were granted when previous ones had gone unserviced.

    This same bank also need to explain why they claim to have ‘lost’ the records but still pursue innocent pensioners for someone else’s debt.

    No paperwork = no debt.

  • The views expressed in readers' comments are not necessarily shared by the Cyprus Property News.


Back to top