Cyprus Mail
Cyprus

Finance minister raises prospect of a ‘bad bank’

By Angelos Anastasiou

The prospect of creating a privately-funded asset-management company – or ‘bad bank’ – to help address the problem of non-performing loans (NPLs) is one that could be explored, finance minister Harris Georgiades said on Tuesday.

In response to a suggestion by chairman of the House Finance committee Nicolas Papadopoulos that the government create a bad bank, Georgiades said he continues to consider such a vehicle “useful”, adding that it carries several unanswered questions relating to its funding.

An asset-management company would take over collateralised distressed loans from banks at a discounted price, and proceed to either try to salvage the loan or liquidate the collateral.

Although the issue was tabled years ago, the consensus was that the country’s stretched finances could not handle further strains.

On Tuesday, Georgiades dispelled the theory, laying out the real reason the government had been opposed to funding a bad bank.

“It is not up to the Troika to decide what counts as public debt, but certainly government funding, that is the taxpayer footing the bill, is not an easy call to make,” he said.

“Right now there is private-sector funding, and perhaps the prospect of raising private cash to fund such a vehicle should be explored,” he added.

Related Posts

Ugly scenes as farmers protest outside presidential palace (video)

Gina Agapiou

School bus for primary pupils on pilot basis from September

Gina Agapiou

Emilianidou still in critical but stable condition, ministry says

Jonathan Shkurko

Paralimni Mayor at odds with MPs over water sport concessions

Jonathan Shkurko

Coronavirus: New operating hours for vaccination centres

Staff Reporter

Two fines for undeclared workers

Jonathan Shkurko

9 comments

Comments are closed.