Cyprus Mail

Government recapitalisation plans for co-op angers banks

By Stelios Orphanides

The Association of Cyprus Banks opposes government plans to recapitalise bailed out Cooperative Central Bank with a new levy, an official of the business group said.

“We have no objection if a bank’s shareholder decides to strengthen its capital adequacy,” Michael Kammas, director general of the bank association said. “The way it is done though, via imposing a consolidation tax, is causing concern and the reason is that this consolidation tax which was introduced in 2011 will be replaced by a new European consolidation tax. If the main shareholder wants to strengthen the capital adequacy of a bank, there are other ways to do so”.

Kammas’ comments came as lawmakers of the finance committee were scheduled to debate on Tuesday morning a package of draft laws which will inter alia provide for the recapitalisation of the Cooperative Central Bank which received in 2014 a €1bn capital injection from the government.

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