Central Bank says banking system in Cyprus is robust

The banking system in Cyprus is resilient and will continue to support the real economy, the Central Bank assured President Nicos Christodoulides on Monday.

Christodoulides and Central Bank chief Constantinos Herodotou were holding their first official meeting since the new government took office.

According to a statement, the two discussed ongoing developments, in particular the situation with Credit Suisse. Both men said they were “satisfied” with how Swiss authorities have handled the matter.

During the meeting, Herodotou conveyed to the president that “Cypriot banks have a robust capital adequacy and liquidity.”

Meanwhile also on Monday parliament decided to summon the finance minister as well as banking and financial regulators for a briefing on the possible risk of contagion to Cyprus from the collapse of major banks in the United States.

The session will take place next week.

The matter was tabled for discussion by Akel MPs. According to a statement, they want to discuss with officials the “potential fallout on the Cypriot economy from developments in the global banking system, and the need to take preventative steps.”

Akel MP Andreas Kafkalias told journalists on Monday that it’s imperative parliament gets a direct briefing on the true extent of the exposure of banks and businesses in Cyprus to a possible chain reaction following the demise of SVB and Signature Bank in the United States.

He said officials must answer whether the unfolding situation poses systemic risks for the Cypriot economy.

Among those summoned to parliament are Finance Minister Makis Keravnos, the Central Bank governor, the head of the Securities & Exchange Commission, the bank association and the institute of certified public accountants.

Meanwhile the Central Bank governor is meeting with the CEOs of Cyprus two major banks on Tuesday.