Cyprus Mail

‘CBC has lost credibility’ (Updated)

Stavros Zenios

By George Psyllides

A Central Bank of Cyprus (CBC) board member resigned on Friday saying the supervisor was dysfunctional and it had lost its credibility. He also spoke of political meddling and vested interests.

Stavros Zenios asked for the resignation of Central Bank Governor Chrystalla Georghadji and also blamed the president, the finance minister, and parliament, for the poor state of affairs at the supervisor.

“It is impossible for me to speak in public of renewal, modernisation, and transparency, and continue to serve an unreliable institution,” he said during a news conference.

“We have reached a dead end; at the moment I do not see a solution to the dead end,” he said, adding that those responsible must show courage and institutional changes must be brought about to strengthen the CBC.

Zenios, a professor at the University of Cyprus, is one of five non executive board members.

His resignation follows last week’s fracas over conflict of interest allegations concerning the CBC Governor whose estranged husband, a lawyer, was handling a case against the Resolution Authority (CBC).

Political parties and President Nicos Anastasiades have asked for her resignation but Chrystalla Georghadji refused to go. Parties also called for the board to step down.

Anastasiades has initiated legal procedures for her removal.

CBC executive Stelios Kiliarias has also tendered his resignation.

“Unfortunately, when the governor is doubted because of conflict of interest and clumsy management, it is extremely difficult for the Bank to do its job and win the trust of society and the state,” Zenios said. “The board indicated the dysfunction caused by the conflict of interest. Unfortunately, we were not heeded.”

Zenios said the Resolution Authority could not convene without the governor because of conflict of interest.

He said his resignation was also related with the involvement in the whole affair of law firms, and political and state officials.

Zenios also rejected criticism from the finance minister who charged the Resolution Authority with delays, forgetting that he participated in the Resolution Authority for months before the CBC board took over,

He said he was sad to resign from a position the president put him in.

“He is faced with a difficult situation caused by people he had trusted,” Zenios said. “The choices however, were clearly his. I am very sorry because under the circumstances I cannot be useful to the president of the country.”

Zenios said he had also proposed switching to a collegial form of management with an executive committee and full independence of the members.


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