In the last few weeks one story has dominated the news and monopolised political debate – the giving away by the government of the healthy business of the Cyprus Cooperative Bank (CCB) to Hellenic Bank. It has been the subject of endless discussions at the legislature, long articles by economists and business writers, political recriminations and has caused the attorney-general to set up an investigative committee to look into the possibility of criminal responsibilities.
As if this were not bad enough, there was also a mini bank run, sparked by rumours that CCB deposits were not guaranteed, with people queuing outside the CCB branches in order to withdraw their cash. While all this was happening the Governor of the Central Bank Chrystalla Georghadji was neither seen nor heard. The truth is she has not been seen or heard for the last two to three years but we would have expected her to make an appearance at a time when the banking system was shaking, if only to reassure the public things were under control. There was a central bank announcement to this effect but it was not from the governor.
If a ship was in rough waters, passengers were panicking and the captain was holed up in his cabin refusing to take charge of the situation he would most probably be charged with dereliction of duty and lose his job. No such rules apply to the governor of the central bank, but this does not make Georghadji’s decision to stay in hiding acceptable. While the banking sector is under the direct control of the ECB, the governor still has a role to play, even as its local representative. In fact, people would be more inclined to take seriously the views of an independent state official that represents the ECB than any member of the government, which caused the mess.
Georghadji is destined to be remembered as the governor who wasn’t there. On her appointment, many had argued that she was not up to the job, a view she has emphatically confirmed over the last couple of years. She is completely out of her depth, her understanding of banking questionable if it exists, and lacking the personal qualities required for such an important job. And this person is the best-paid public official in Cyprus, taking a higher salary than the president for staying hidden in her office and refusing to show her face or utter a word while a systemic bank was being dissolved by the government.
The honourable thing for her to have done, if she felt she was not up to the job, would have been to step down instead of carrying on taking a big fat salary for a job she very clearly cannot do.