CRITICISM by political parties towards the government's handling of the
In the aftermath of a direct threat by governor of the
"The lessons of previous years should lead us to a different conclusion, namely that banks and bankers cannot be left unchecked by the oversight authority, without expressing the state's interest, resulting in the disasters of the recent past," he said. "Therefore, within the framework set by the state, the state's interest is being expressed in actions of strategic importance."
The finance minister argued that the recent favourable investor sentiment towards
"Investors' readiness to trust Cypriot banks proves that actions have been undertaken, but most importantly that there are prospects," he said. "We would like to see these prospects benefit our economy as a whole."
"A thinly capitalised bank will not be in a position to restructure loans or extend new credit to the economy, nor will it be able to be placed under the direct oversight of the
Meanwhile, rumours of significant investor interest in acquiring a stake in BoC were confirmed by Georgiades, though he hastened to acknowledge that the ultimate decision rested not with the government but with the bank and the oversight authority.
"We have been informed by the bank itself, and the CBC, that on the back of the government's recent successful borrowing bid, the goal of attracting funds – especially foreign funds – is both achievable and necessary," he said. "But of course, these decisions do not belong to the government but the banks themselves and the oversight authority."
Georghadji's letter to the BoC board on Friday, which sought to impose the CBC's will for an immediate capital increase had been widely criticised by political parties across the spectrum. They charged that the government had no business meddling with banks' internal affairs, but according to Georgiades this clashed with what they had previously said.
"I addressed the
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