Interview with Athanasios Orphanides, Governor of the Central Bank of Cyprus, conducted on 6 August 2010 by Michele Kambas and Krista Hughes

Q. Is 2010 growth likely to be better than foreseen in the June staff forecasts?

The incoming data have been somewhat better than anticipated in earlier projections and I would not be surprised if the staff projections in September do show an improvement for the whole year 2010 compared to the previous projections.

Q. Do you see an improvement within the 0.7-1.3 pct range (from June) or beyond that?

I would say an improvement within the range.

Q. Will the buoyancy spill over into next year?

We will have to wait and see on that. The recovery remains uneven so we are pleased to see signs of improvement but we need to continue to monitor very carefully the prospects.

Q. Will a quick removal of government stimulus drag on growth and is this recovery self-sustaining?

In a number of countries in the euro area, the removal... Read more »

TWO CYPRIOT bank officials face charges of money laundering and unfair use of confidential information lodged by the Romanian authorities.

The state broadcaster CyBC reported last night that four bankers in total, two Romanian and two Cypriot, were being investigated on the above charges.

Quoting the Athens News Agency, the broadcaster said that the two Cypriot employees from the Bank of Cyprus branch in Romania, allegedly passed on information to two Romanian colleagues that Banca Trasilvania was looking for a strategic investor and that the Cypriot bank planned to buy a significant number of shares in the Romanian bank. The bankers in question then allegedly bought shares worth millions, making huge profits.

The Romanian Legal Service has reportedly cleared the two banks in question of any wrongdoing, maintaining that the four bankers were acting for their own interests from May 15 to December 10, 2009.

The Bank of Cyprus released an announcement yesterday backing its... Read more »

The Central Bank of Cyprus rejects applications from banks outside the European Union for their activation in the Cypriot market due to the global economic crisis. The material that was submitted to the Supreme Court after the appeal of the Montenegrin Bank Altasmont against the CB decision not to examine its application, shows how hesitant the supervisory authority is to open the doors of the domestic banking system to banks from third countries.

According to a StockWatch report released yesterday, Atlasmont, which has a representation office in Limassol, applied in May for the opening of a branch so as to exercise banking activities on the island. In June, the CB rejected the application, stressing that it does not examine bank licenses.

In its reply to the foreign bank, published by StockWatch today, the CB supervision department explained that “the Central Bank of Cyprus, after a careful evaluation of the ongoing global economic crisis, decided not to proceed with the exami... Read more »

The Central Bank of Cyprus decided to intervene in the relations between the banks and the auditors via a directive regulating the information that the audit firms ought to submit to the regulatory authority for the economic robustness of the banks. In the directive released in November, the CB specified former provisions of the banking law, asking by the bank auditors to inform it on anything that might affect the depositors’ interests. The main aim is to "create a constructive communicative relation with the auditors so as to promote the offer of information to the CB, which will facilitate its supervisory activity”.

The new directive aims to determine the frameworks of the trilateral meetings of the CB with the banks and the auditors as well as the confidential, bilateral meetings of the supervisory authority with the auditors in the absence of the banks. It also describes the cases that the auditors must inform the CB on the possible violations of their customers.

Durin... Read more »

The Central Bank of Cyprus announces the operation of an e-shop for the on-line sale of numismatic items, at http://eshop.centralbank.gov.cy. This site can also be accessed from the Central Bank of Cyprus’s website ( www.centralbank.gov.cy ). 

THE BAD news on the economy has been coming thick and fast: a fortnight ago, we learned there was a gaping hole in public finances of €600 million, likely to send the public deficit spinning beyond the eurozone’s permitted threshold of three per cent; last week came confirmation of what everyone has been dreading, as Cyprus officially slipped into recession with its second consecutive quarter of negative growth. This week saw news that will compound the woes, as its impact filters into the wider economy, with figures showing peak season tourism down 11.2 per cent on last year, and bleak forecasts for the months ahead.

Asked last week to comment on the situation, Finance Minister Charilaos Stavrakis, replied, “I am on holiday. I cannot talk. Thank you.” Well, the holiday is well and truly over for Cyprus, thank you very much. And while government ministers may try to eke out a few more days away from the public glare, there is nowhere left to hide once they return to their desks. ... Read more »

The National Bank of Romania and the Central Bank of Cyprus, expressing their mutual interest and willingness in promoting further the bilateral ties in the domain of supervision of credit institutions, have recently updated the Memorandum of Understanding which was signed between them in 2002, before the accession of Romania and Cyprus into the European Union, in order to integrate, in the new Memorandum of Understanding, recent developments in the field of banking supervision. 

The updated Memorandum of Understanding has been signed on behalf of the National Bank of Romania, by its Governor, Mr Mugur C. Isarescu and, on behalf of the Central Bank of Cyprus, by its Governor, Mr Athanasios Orphanides.

The Memorandum of Understanding defines a general framework of mutual cooperation and exchange of information between the two supervisory authorities, for the purpose of facilitating the performance of their supervisory funct... Read more »