The Central Financial institution of Cyprus (CBC) assures, in a written assertion, that the mandatory precautionary measures have been taken to reduce any impression of the conflict in Ukraine on the Cypriot monetary system. On the identical time, CBC notes that as a result of fast developments, the evaluation of the potential impression and the attainable dangers is steady.
CBC was replying to a query of Cyprus Information Company concerning the extent of publicity of the Cypriot monetary system to Russia and Ukraine respectively and the measures taken to take care of the results of the Ukrainian disaster.
In line with the reply from the workplace of CBC Governor Constantinos Herodotou, the CBC in cooperation with the European Central Financial institution (ECB) is carefully monitoring developments in Ukraine and any implications of what’s taking place, but in addition of the sanctions which have been imposed or are going to be imposed.
“The CBC and the ECB have taken well timed and precautionary measures to make sure that any impression, together with the extent of the banks` publicity to Russia, is restricted,” it’s famous.
On the identical time, the CBC says that as a result of efforts of current years, the Cypriot banking sector has now an elevated capability to soak up any shocks. As talked about, the degrees of capital adequacy, as assessed by the Widespread Fairness Tier 1, amounted to 17.2% in September 2021, a share considerably increased than the corresponding European common of 15.7%, thus strengthening the capability of the home banking sector to soak up surprising losses and to proceed offering financing to the true economic system.
CBC additionally notes that the Cypriot banking sector is now among the many most sturdy in Europe when it comes to liquidity ranges with the protection ratio reaching 345% in January 2022, a degree that’s nearly twice the European common (174%) and greater than 3 times its minimal supervisory requirement of 100%. As well as, it’s famous, that the deposit base of the Cypriot banking sector in January 2022 amounted to € 51.3 billion, one of many highest ranges noticed since 2014, with the share of home residents in deposits reaching 82%, which strengthens considerably the steadiness of the sector.
Additionally it is famous that Cyprus’ systemically essential banks are below the direct supervision of the ECB.
“Because of the fast developments, the evaluation of the potential impression and potential dangers (cyber safety dangers, weakening financial surroundings, impression on vitality costs, and many others.) is ongoing, in order that any measures will be reconsidered,” the CBC says within the written assertion.
No specific issues on account of sanctions, Cypriot banks on a wait-and-see place
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Cypriot banks are taking a wait-and-see method amid the continued course of concerning sanctions in opposition to Russia, with financial institution executives saying that the sanctions to this point don’t pose any specific downside.
Because the discussions revolve round slicing off Russia from the worldwide system for monetary transactions SWIFT, Financial institution of Cyprus sources advised CNA that a variety of Russian banks are already on the listing of sanctions imposed by the USA and UK.
“So far as the financial institution is worried, we absolutely adjust to the sanctions, which don’t pose any specific downside for us since we have now a lot of banks that we cooperate with,” mentioned the identical sources.
Relating to the broader enterprise of the financial institution, the identical sources famous that there isn’t a specific impression apart from the implementation of sanctions on the financial institution’s techniques. “The scenario is ongoing and we’re monitoring developments.”
As well as, with regard to transactions in rubles, the identical sources mentioned that the financial institution takes all acceptable actions in accordance with the sanctions and relying on how the banks of the Eurozone are performing.
(CNA)