NICOSIA -- The results of a due diligence review carried out by US-based investment management firm Pimco on the Cypriot financial system will be announced on Friday, Central Bank of Cyprus said on Monday.
The results will determine the total capital needs of the Cypriot financial sector which in turn will show whether the Cypriot sovereign debt will be sustainable. The due diligence was carried out in the context of Cyprus` application for financial assistance from the European Stability Mechanism.
Meanwhile, CBC spokeswoman Aliki Stylianou told CNA that the members of the Steering Committee which oversees the due diligence review will arrive in Cyprus to examine some elements of the methodology used by Pimco over which there are some discrepancies. The steering committee includes representatives from the Cypriot authorities, the EC, the ECB, the EBA and the ESM and the IMF (as observer).
"The members of the steering committee will be in Cyprus to discuss some elements of Pimco`s methodology for which there is disagreement," Stylianou said.
The capital needs of the financial sector will be part of Cyprus` financial assistance package estimated at €17.5 billion, of which up to 10 billion will be used for recapitalizing the banking sector, which posted mammoth losses as a result of the Greek debt haircut and its exposure in the Greek economy.