Unanswered questions

10 September 2014

The Central Bank of Cyprus (CBC) has yet to answer a number of key questions following its decision to impose the Resolution Decree against FBME Bank on 21 July. Here is our Top Ten:

1.  Why did the CBC decide on 21 July to take over and try to sell the Cyprus branch of FBME Bank, what progress has been made with that sale and why have the actual owners not been at least consulted?

2.  What is the legal basis for the CBC’s decision to impose the Resolution Decree against FBME Bank on 21 July when it is understood that this Decree is designed for defunct or illiquid banks?

3.  Given that the Bank of Tanzania as the Home Regulator has the senior role in Resolution matters, has the Central Bank of Cyprus established coordination with the BoT’s Statutory Manager to carry out an orderly administration of affairs?

4.  When will FBME Bank be able to trade normally again in Cyprus; how long is the mandate of the Administrator?

5.  Given the Administrator’s 1 September’s announcement unblocking accounts of FBME customers up to €10,000, what further plans does CBC have to unblock all accounts of FBME’s clients particularly those of foreign clients not based in Cyprus and unable to withdraw their funds?

6. Is CBC sorry for the inconvenience and distress that it has caused FBME Bank’s customers?

7.  What measures will the Central Bank of Cyprus take to repair harm done to FBME depositors and the FBME Bank itself?

8.  Given that the Central Bank of Cyprus holds over €100 million of FBME bank’s deposits, when will these be released to FBME and its depositors?

9.  Have the threats made to individuals in FBME by the Administrator, in particular in relation to not signing off salaries been rescinded?

10.  When will senior officials of the Central Bank of Cyprus sit down with the owners of FBME Limited?

To us it seems reasonable to expect some form of public statement on these subjects from either the Governor or her senior officials from the Central Bank. Resolution measures have been in place now for seven weeks, after all. Surely someone has to come up with a strategy to get us all out of this mess.