The Association of International Banks (AIB) on Thursday urged lawmakers to move ahead with the foreclosures legislation to ensure Cypriot banks were never again in need of assistance.
Parliament has suspended implementation of the law until March 2, citing the necessity of waiting until related legislation on insolvencies is passed on the grounds of protecting vulnerable groups but there is no guarantee the suspension of the foreclosures law will not be extended again.
AIB said that after reforms in the banking sector and the recapitalisation of Cypriot banks, the Cyprus economy was following a path of gradual recovery from the crisis.
“A crisis the people of Cyprus have endured and are overcoming with sacrifices, dignity and an admirable hard working spirit,” it said in a statement on Thursday.
“This is precisely why these positive developments should not in any way be jeopardised by delays in the foreclosures legislation. The depositors of major Cypriot banks have had to face a bail-in and we are therefore confident that the lawmakers of Cyprus will ensure that this will never happen again and shall therefore enable the banks in Cyprus facing issues with NPLs to deal effectively with the problem.”
It said adequate and balanced foreclosure legislation was one of the cornerstones to ensure that Cypriot banks were never again in need of assistance, which according to the new European ESM procedures includes a potential partial participation of the depositors in the rescue of banks.
“By voting on the balanced foreclosure legislation the lawmakers are not protecting the interests of banks but those of their depositors and of the Cyprus economy at large,” AIB said.
“Cyprus deserves to reclaim its position as a trustworthy and sound economy in the eurozone and we are confident that we will all continue to work hard in that direction,” it added.
The Association of International Banks was set up in Limassol in 2002, with the aim of representing and protecting the interests of international banks in Cyprus. The Association brings together 25 banks from nine countries. The assets of the association’s members are worth €14bn in total.