Cyprus Mail

Moral hazards in banking may prove costly for Cyprus, DISY lawmaker warns

By Stelios Orphanides

DIKO refuses to budge on its proposal to grant borrowers the right to buy a loan before the lender sells it to a third party, prompting a DISY deputy to warn that mixing economic policy with social policy could make the law on the sales of loans ineffective.

“As DISY we acknowledge the moral hazard and we are concerned,” lawmaker and economist Marios Mavrides said. “But since we have to pass this law, as it is the case across Europe, we can’t do otherwise, we have to pass it. The sale and securitisation of loans is uniform across Europe”.

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