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Finance Minister expresses intent to step down at the end of the year

March 15, 2019 at 1:13pm

Finance Minister Harris Georgiades announced on Friday his intent to step down by the end of 2019.

Georgiades has been named by a committee of inquiry as the person responsible for the collapse of Cyprus’ co-op bank (CCB) in July 2018.

Although he described the committee’s findings as inaccurate, he said that he and the President were ready to shoulder the political responsibility for CCB’s collapse.

He added that his stepping down has nothing to do with the committee’s findings and that the problems facing the CCB  had delayed his decision to resign.

“I am not attached to the Minister’s position,” he said.

All banks in Europe had problems with non-performing loans

Georgiades explained that after reading the committee’s findings, he had reached the conclusion from the report that the CCB’s executive board failed to manage the bank’s non-performing loans (NPLs) and that the Finance Minister was held responsible.

However, banks all over Europe have had to handle an increased amount of such loans and have made successive capital increases, as supervisory requirements changed, he added.

“All European banks needed additional funds in the past years. The committee did not recognise that supervisory requirements constantly change,” he said.

The Minister compared CCB with Alpha Bank, whose president Giorgos Georgiou sat on the committee of inquiry and said that Alpha Bank’s non-performing loan situation was the second worse after the CCB.

He said that the management of NPLs by the CCB was the same as by other commercial banks.

Asked to comment on why the bank’s executive board failed to reduce its expenses, he argued that spending decreased significantly and said that the CCB was doing better in this area than commercial banks.

Commenting on the committee’s argument that he did not select “the most able people” in key position of the CCB and did not act on his right to fire them if he deemed them incapable to perform their duties, the Minister said that the Central Bank also, had every right to remove them from their positions.

He also laid part of the blame to the CCB’s former CEO Marios Clerides – who was not selected by him – for also failing to reduce NPLs.

More recruitments were made during Clerides’ administration than when Hadjiyiannis – a personal friend of Georgiades who was selected by him to succeed Clerides (2015-2018) – was CEO, the Minister said.

Read more:

FinMin bears responsibility for co-op collapse, investigating committee finds