Cyprus Mail
CM Regular ColumnistOpinion

Something stinks over CB’s treatment of FBME

By Johan van den Kerkhof

IT’S PRETTY darn clear even to us dopes that the Central Bank has botched it big time as far as the FBME debacle goes. Sure, the bank may be crooked as a dog’s hind leg. But something stinks here.

Far be it from me to defend the banksters of the world, but whatever happened to all that ‘innocent till proven guilty’ crap? The bottom line: authorities have seized a bank based on allegations by the US Treasury. No proof, no prosecution, no court ruling , no nothing. Basically the Americans snap their fingers and the Cypriots jump up like lapdogs. And the bank goes bye-bye.

That’s what it looks like. Sure, maybe we’re missing something, but we wouldn’t know it either way because the Central Bank is keeping mum. Its treatment of FBME has been way too heavy-handed.

In a rational world, you’d expect the allegations to be substantiated first, followed by the repercussions. If you prove FBME is laundering money for Hezbollah, then revoke their licence and/or fine them (not Hezbollah).

Again, FBME might well be a dodgy bank. As the adage goes, there’s no smoke without fire. But where’s the due process?

Of course we all know what’s happening here. It’s politics. US authorities have prosecuted exactly no one for the 2008 financial meltdown, which originated there. But when it comes to non-American and non-British banks, they go all Fallujah on their ass.

HSBC launders money for Iranian terrorists and Mexican drug cartels, they get a slap on the wrist the first time round and then settle out of court for $1.92bn. No charges, scot free.

More recently, we heard how the indescribable US Attorney General Eric Holder (allegedly) cut a backroom deal with Jamie Dimon, CEO of JPMorgan Chase & Company, for a $13bn settlement. Apparently Sheriff Eric gets a call from Jamie the Bandit and, the charges of mortgage-related securities fraud against JPMorgan go poof. “Too big to jail” has long entered the lexicon.

At least the US government is slowly taking back some of the $700bn of taxpayers’ money used to bail out US banks in 2008. Just $650bn to go, fellas.

Meanwhile US federal prosecutors are pushing two European banks, BNP Paribas SA and Credit Suisse AG to plead guilty to criminal charges to resolve separate investigations.

Double standards? Nah.

Back home, it’s hard to wrap your head around what authorities are doing. This is truly a country of extremes: from almost non-existent bank supervision before the 2013 bust, to a shoot-first, ask-questions-later policy as now witnessed in FBME’s case.

It was during the panic days of March 2013 when the House passed the Resolution of Credit and Other Institutions Law, giving the Central Bank here sweeping powers. Absolute power corrupts absolutely, etc etc.

Who knows, maybe the Central Bank’s response has something to do with the fact Cypriots tend to get the heebeegeebees whenever someone abroad says “Cyprus” and “money laundering” in the same sentence. Given recent experience, with the island called a “casino economy” just before the bail-in smack-down, it’s perhaps understandable that these two words trigger a kneejerk reaction.

Again, maybe there’s something us saps are unaware of. But FYI to Chrystalla Georghadji: Madam, please know that nowadays what goes on in the good’ ole US of A ain’t exactly a litmus test for fair dealing. Don’t go down that road.

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