By Stelios Orphanides
Cypriot banks may require an unspecified amount of additional capital, should the parliament pass the draft bill facilitating the issuance of title deeds to buyers of property from insolvent developers, an official at the Association of Cyprus Banks said.
The implementation of the proposed law, which international creditors have declared to a prior action required for the release of the next tranche of bailout cash of over €0.5bn and would benefit up to 78,000 buyers of property in Cyprus, would eliminate the value of collateral banks received from developers in exchange for loans, the official at the association said. “Affected banks would have to request additional collateral from developers and if they are lucky, they could get it. If not, the book value of affected loans would decrease, which could make finding additional capital necessary”.