Cyprus Mail
Business Cyprus

CBC board member resigns

Governor Panicos Demetriades

A Central Bank (CBC) board member has resigned after finding work abroad but also because he was unable to cooperate with the current governor.

In his resignation letter, published by online financial news outlet Stockwatch, Alexandros Michaelides said he has been working in London since September and did not expect to return to Cyprus soon — something which made it difficult for him to attend board meetings.

However, Michaelides also said he could not cooperate with Panicos Demetriades, following certain recent events.

One concerned an open letter Michaelides wrote, protesting the governor’s decision to cancel a board meeting.

In response, the governor asked for a legal ruling on whether Michalides had violated confidentiality clauses by publishing the letter.

Michaelides suggested there were other, more serious matters, on which he disagreed with Demetriades, but he did not elaborate.

“As you may realise there are other issues but it would be better if I did not refer to them outside the board,” he said, “… sparing taxpayers the expense of other legal opinions.”

Michaelides said the CBC must change its structure and base it on that of other, better organised central banks.

Demetriades, a member of the Governing Council of the European Central Bank, has been accused by President Nicos Anastasiades of mishandling the island’s bailout by international lenders in March.

Cyprus had to close a major bank and seize savings held in a second in return for €10 billion euros in aid.

Appointed by the previous communist administration, the Central Bank chief has been criticised by the government of being slow in restructuring the banking sector.

He has maintained that when he took over, less than a year before the bailout, he assumed a poorly regulated banking system which took excessive risks.

More recently, he found himself at the centre of another storm after media disclosures of a March agreement between him, and consultants Alvarez and Marsal.

The consultants had sought a percentage of the amount raised from the recapitalisation of Cypriot banks.

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