Cyprus Mail

Greek bank subsidiaries ‘ringfenced’ and safe, says CBC

Central Bank of Cyprus

By George Psyllides

GREEK bank subsidiaries in Cyprus are ring-fenced and face no risks from the instability in Greece, a senior Central Bank (CBC) official said on Friday.

“There is no cause for concern and we should not create a problem ourselves,” said Yiangos Demetriou, the head of the CBC’s supervision department.

On Friday, Demetriou met with senior managers of the four subsidiaries – Alpha, National Bank of Greece, Eurobank, and Piraeus.

“We have frequent meetings, exchange views often, as with the rest of the Cypriot banks,” Demetriou said, adding that Friday’s meeting did not have a special agenda.

He said the four subsidiaries were Cypriot entities, having the Greek banks as shareholders. They are licensed and supervised by the CBC, are adequately capitalised and have enough liquidity.

“We do not see any risk from any development there might be in Greece,” he said.

Asked whether the shareholder could influence the lender’s capital and liquidity, Demetriou said the CBC has measures in place and has, along with the European Single Supervisory Mechanism, ensured that any exposures have been eliminated and there is no Greek risk in the subsidiaries’ books.

The four banks are ring-fenced, he said, and there was no danger. But he struck a note of caution because there was always the psychological factor and how people would react if there was a problem in Greece.

“We hope there is no negative development in Greece and hope there will be a conclusion so that Greece won’t have problems,” Demetriou said.

Eurobank Cyprus CEO Michalis Louis said there was no particular concern among the subsidiaries’ clients, reiterating there was no risk of spillover.

Cypriot banks, including those of Greek interests, are very well capitalised, have significant liquidity, and were in a position to tackle any situation, he said.

Louis said the Cypriot outfit did not hold any Greek bonds and was not exposed to the parent company.

National Bank of Greece CEO Nicolaos Beis said meetings with the CBC took place on a regular basis.

“There is a general concern and interest but so far things were progressing at a very mild pace,” he said. “The situation is very calm and under full control.”

“With the measures put in place by the CBC, we have no exposure to Greek risks; there is stability and people realised this and they are sure that things are positive,” Beis said.

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Source: Cyprus News Agency


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