Cyprus Mail
Cyprus

IMF experts in Cyprus to look at solvency laws

The IMF headquarters

AN International Monetary Fund (IMF) team of experts is in Cyprus to scrutinise the island’s solvency law, reports said yesterday.

The Cyprus News Agency said the experts arrived here on Monday and would be meeting all stakeholders during week-long contacts, in a bid to examine the solvency law and make recommendations for amendments.

The team’s visit comes in the wake of the second review of Nicosia’s economic adjustment programme by international lenders.

Amid the continued economic slump, a key concern in the fragile banking sector is the rise of the non-performing loans, estimated at 30 per cent of total loans by March 2013.

Recent data released by the Central Bank estimated that overall NPLs stand at around €15.5bn.

Troika officials during their second review indicated they are not in favour of mass-scale seizures of primary residences.

The Bank of Cyprus has warned it will go after those who can pay their mortgage but use the economic crisis as an excuse not to do so.

At the same time the troika believes that legal obstacles to the seizure of property pledged as collateral should be limited to encourage viable borrowers to pay their loans and avert “strategic defaults.”

The updated memorandum of understanding (MoU) notes that “strong efforts should be made to maximise bank recovery rates for non-performing loans, while minimising the incentives for strategic defaults by borrowers.”

It moreover stipulates removing administrative hurdles currently constraining the seizure and sale of loan collateral so that property pledged as collateral can be seized within a maximum of 2.5 years, the MOU states.

“The necessary legislative changes are to be submitted to parliament by end of February 2014 and implemented by end-2014, macroeconomic conditions permitting. The authorities commit not to introduce any further impediments to the seizure of assets pledged as collateral.”



Related posts

Coronavirus: Black Friday gets extension as shops seek to redress trade fall

Jonathan Shkurko

More villages ask to be part of development plan

Nick Theodoulou

Okypy, nurses wrangle over staffing numbers

Evie Andreou

Coronavirus: Crossings clarification means only Limnitis can use 72-hour old test

Evie Andreou

Coronavirus: GPs slam ministry decision for them to monitor Covid patients

Evie Andreou

Coronavirus: Two deaths, 252 new cases (updated)

Nick Theodoulou