NICOSIA - The Governor of the Central Bank of Cyprus Panicos Demetriades has sent a letter to the Troika (European Commission, European Central Bank, International Monetary Fund), asking for Cyprus’ international lenders to inform Cypriot banks about the amount they would need to cover their capital needs, as this is estimated by PIMCO.
CNA has learnt that in his letter, dated 19th of February, Demetriades notes that banks need that amount to proceed with the preparation of their restructuring plans so as to restore confidence and stability in the financial system of Cyprus.
According to the preliminary agreement between the Troika and the Central Bank, Cypriot banks will be given an amount to cover their capital needs, as estimated in the PIMCO report, and then submit to the Central Bank their restructuring plans. The amount needed for the recapitalisation of Cypriot banks has not been made known yet.
The Laiki Popular Bank, which has received state aid, must submit its restructuring plan by mid-March, while the rest of the Cypriot banks should submit their plans until the end of April.
The bank restructuring plans will be approved by the Central Bank of Cyprus, the Ministry of Finance, the Troika and the DG Competition of the European Commission.
Moreover, CNA has learnt that the Central Bank will inform the Eurozone member states about measures to combat money laundering adopted and implemented in Cyprus, after Eurozone member states had expressed their concerns on the issue.
The Republic of Cyprus applied on June 25, 2012 for financial assistance from the European Stability Mechanism estimated at 17.5 billion euro which is equivalent to its GDP. The programme is expected to be agreed on Eurogroup level in March, after the presidential elections in Cyprus that take place this Sunday.