Nicosia, Cyprus. Cyprus’ banking sector has called for close cooperation with the state and the newly elected House of Representatives, while warning that interventions in foreclosures and lending could undermine financial stability. The remarks were delivered at the annual general meeting of the Association of Cyprus Banks.
Call for cooperation
Association of Cyprus Banks chairman Panicos Nicolaou said in his address that the sector was sending a message of cooperation to both the government and members of the newly elected parliament.
He said the banking sector’s longstanding positions on the need to preserve a stable foreclosure framework are based on economic realities rather than subjective assessments.
Reference to ECB opinion
Nicolaou said these views had been reinforced by the recent and strongly worded opinion issued by the European Central Bank.
At the beginning of his speech, he said the stability of the financial system is increasingly taken for granted by many people, despite the fact that maintaining that stability is far from automatic.
He said Frankfurt had made it clear that horizontal interventions, proposals made without impact studies and populist calls to suspend procedures do not protect genuinely vulnerable borrowers, but instead undermine financial stability, reward strategic defaulters and increase borrowing costs while depriving the Cypriot economy of liquidity.
Priorities for the sector
Nicolaou said the interests of depositors, responsible borrowers and young people seeking financing to start their lives or establish businesses should remain a priority.
He also said the reduction in non-performing loans demonstrates that citizens have become more financially mature.
He said people better understand their obligations, plan more carefully and act more responsibly.
Financial literacy
Nicolaou said there is still progress to be made in financial literacy and that the Association of Cyprus Banks intends to invest more in this area in the coming years.