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Governor of Cyprus’ Central Bank statement

21 March 2013

The Governor of the Central Bank of Cyprus, Panicos Demetriades, this evening issued the following statement at the Presidential Palace:

“The Central Bank of Cyprus has proposed the urgent introduction and immediate voting of a legal framework into a Law by the House of Representatives regarding the resolution and the recovery of the Cyprus banking system. Through the resolution process the danger for the bankruptcy of the banking system is avoided and all insured deposits in their entirety up to the amount of 100.000 euro are protected. In addition, the preconditions for the recovery of the banking system are created and jobs are secured.

Resolution constitutes an important step towards the direction of achieving an agreement for the economic support of the Republic of Cyprus by the European Support Mechanism and the IMF, while at the same time, it creates the preconditions for the provision of the necessary liquidity to the banking system of Cyprus.

By enacting and bringing into force the above legal framework, resolution measures will be implemented at the Popular Bank so that it is in a position to continue to offer banking services to its clients when the banks reopen next Tuesday. Otherwise, the Popular Bank will go into immediate bankruptcy and termination of its activities, with catastrophic consequences for the employees, all of its depositors, our banking system and the economy of the country.”

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