Brussels, 28/05/2013 (Agence Europe) - The governor of Cyprus' central bank, Panicos Demetriades, said on Tuesday 28 May that the price at which the Greek subsidiaries of Cypriot banks have been sold was “satisfactory.”
A Cypriot source said the banks had initially been bought for €1.5 billion, but they have been sold for €524 million.
Demetriades said that agreement between Greece and Cyprus on the bank sale was a precondition for the granting of financial aid to Cyprus by the troika of international lenders (European Commission, European Central Bank and International Monetary Fund). The aim was to prevent the Cypriot crisis spreading to Greece and to reduce the size of the Cypriot financial sector as a proportion of the island's GDP. The Eurogroup wanted, above all, to isolate the Cypriot bank problem and avoid setting off a domino effect between Cyprus and Greece, explained the same source.
The Cypriot central bank announced on Tuesday the appointment of Greek banker, Christos Sorotos, as temporary head of Bank of Cyprus (BoC). He has experience in bank restructuring and will be responsible for restructuring BoC, whose deposits will be raided by at least 37.5%. The final size of the raid will be known before the end of the summer. (EL/transl.fl)