THE BANK of Cyprus, it is fair to say, has become the new Cyprus problem. It has not only been on the front pages of the newspapers every single day in the last six months, but has also been the main topic of discussion on the radio and television shows, by our politicians who have suddenly developed a big interest in banking. Party leaders now know that their only chance of getting on the television news is by taking a public stand on the BoC.
It goes without saying, that the lawyers have also taken a starring role in the new Cyprus problem, filing legal suits, sermonising about the rights of depositors. The latter have become the new refugees, and threatening to take their cases to the European courts.
Even Archbishop Chrysostomos has embraced the new national problem. Yesterday lunch-time, he was on CyBC television airing his objections about the Central Bank governor holding 18 per cent of the BoC’s shares, as it gave him total control.
Before the debate about that 18 per cent, we had the row about splitting of the bank into two, with the party leaders campaigning against such a move before a viability study had even been commissioned. There was also the letter sent by President Anastasiades to the members of the troika – which was unwisely made public – urging them to help save the systemic bank and his subsequent meeting with the president of European Central Bank which was billed make-or-break by the media.
What the politicians, media and other opinion formers have not realised is that they cannot treat the BoC like the Cyprus problem. Their patriotic platitudes and hollow rhetoric about the Cyprus problem were harmless as they had no consequences, but their rants about the BoC are very harmful as they further undermine the very low public confidence in the banking sector. The daily exchanges are confirmation that there is no plan about the bank, that nobody really knows what should be done and that its future is in the balance.
Worse still, now there seem to be a struggle for control of the bank between the politicians and Central Bank governor who is not trusted by parties. But even if there is ample justification not to trust the governor, this does not mean that the politicians, who have their personal agendas and destroy everything they touch, should take control. If the politicians eventually take control, confidence in the bank will never be restored.
The only way the politicians, the government, the Central Bank and the media could help restore confidence in the BoC and the banking system is to stop making it the main topic of public debate.
Every day it is in the news is another blow to public confidence and pushes back the return to normalcy that everyone, supposedly, wants. The politicians and media would be doing the banking sector a big service if they completely ignored it, because turning it into a new Cyprus problem is a recipe for disaster.