Scandal-hit CBC Sizzles in the Summer Sun

3 July 2015

As temperatures rise in the Cyprus summer, newspapers in the Republic are using the analogy to say that the heat has been turned up on the Central Bank of Cyprus. Beset on every side by criticism, the CBC is said to be directionless and decision-making, at least as far as FBME’s Cyprus branch is concerned, is now almost totally absent.

The theme has been picked up by the Greek-language Phileleftheros (click here) and its sister paper, the English-language Cyprus Weekly (click here). As the saga of the commandeering by the CBC of FBME’s Cyprus branch nears its one-year anniversary, the newspapers have reported that the new EU directives that came into force in January request central banks to complete resolutions within a 12-month period.

The suggestion is that this is another European and international rule that the Cyprus authorities will ignore, along with ECB regulations and the Basel Committee guidelines. People say that this is what happens when outsiders who have no experience of banking supervision or even of banking take over bodies like the CBC. This refers as much to Laiki Bank, now 30 months in resolution, as it does FBME’s branch.

Despite repeated offers to meet to discuss and bring a solution to the issues from FBME Bank, no response has been forthcoming from the CBC. These offers have been made verbally, through letters delivered by hand and through this website, without a single reply.

For an authoritative list of the most recent scandals circulating around the CBC readers should click on the websites of media organisations in Cyprus. However, for ease of access a summary would include performance of the authorities in the resolutions of Laiki Bank and FBME’s branch; conflicts of interest in the Laiki case; questionable practices regarding letters of appointment; failures to report to elected representatives in Parliament on matters of national concern; potentially illegal actions in the FBME case; damage done to regulators from other countries; undermining of the reputation of the Republic, and the loss of employment for hundreds of people in Cyprus.

That is generating quite some heat as we enter the hottest days of the year.