Insider Economy CBC Governor warns against changes on foreclosures framework

CBC Governor warns against changes on foreclosures framework

Constantinos Herodotou, Governor of the Central Bank of Cyprus (CBC) warned that a change in the foreclosure framework leading into further delays would place the island’s financial system into new adventures.

Herodotou’s remarks came during a discussion in the parliamentary committee on legal affairs on a revised bill amending the Courts law providing for the creation of a new jurisdiction on the district courts level that would examine disputes between borrowers and credit institutions with regard to a loan balances and charges covering both primary borrower and guarantors as well as bond holders.

With the creation of the new jurisdiction the government aims to speed up court decisions on financial disputes with a view to examine borrower applications which dispute the balance of a delinquent loan due to excessive charges by banks, while many of these loans in a foreclosure procedures.

During the discussion, MPs said the bill scope is not enough and said a freeze in foreclosure proceedings until the dispute is examined by the Courts may be necessary. Foreclosures is considered by rating agencies and the banking regulators as a critical tool in recovering non-performing loans in Cyprus, which are the second highest in the Euro area following Greece.

Stating that the issue at hand is accelerating the lengthy Court procedures and the addressing the delays in Court decisions, Herodotou said “we should not go down a road that will lead us into adventures,” noting that speeding up court procedures will achieve the protection of vulnerable borrowers.

“Let me be clear, if we touch the issue of foreclosures will have new adventures,” he said noting “If a patient has a closed artery you perform bypass surgery, you don’t cut off the leg.”

He furthermore, warned that any change in the foreclosure framework that would protract the process would endanger the peoples deposit, Herodotou said that any such amendments would require an opinion by the European Central Bank and that in turn may lead to increase capital needs possibly trough capital requirements.

“The problem is the speed (in awarding justice) there should no changes that would pit Europe against us,” the CBC governor said.

(CNA)

Top Stories

Care homes begin to allow guests to see one visitor, in London

Nicky Clough visits her mother Pam Harrison in her bedroom at Alexander House Care Home for the first time since the coronavirus disease (COVID-19)...

Signing of Euro-Asia interconnector MoU only the first step

An initial agreement between Cyprus, Greece and Israel to build the world's longest and deepest underwater power cable has been signed but it’s only...

Partly cloudy on Tuesday, with thin dust in the air

Partly cloudy on Tuesday with thin dust in the air and possible isolated afternoon showers mainly in the mountains, according to the island’s Met...

Bilingual children’s book ‘Aria Goes to School/Η Άρια Πάει Σχολείο’ published

Nicosia-based Luzdary Hammad-Stavrou, a mother of two, wife and a passionate high school teacher has self-published her first book ‘Aria Goes to School/ Η...

352 new cases of COVID-19, no deaths announced on Monday

The Health Ministry announced 352 new Coronavirus cases out of 40,891 PCR and rapid antigen tests on Monday, 8 March, taking confirmed infections to...

Taste

Squash soup

Ingredients: 1 kg pumpkin, cut into small cubes, approximately 5 cups 2 medium (400g) sweet potatoes, cut into cubes, approximately 2 ½ cups 1 chopped leek, only...

Mezedes

No visit to Cyprus is complete without enjoying the traditional meal of many small dishes known as ‘meze’. This large feast, which has been a...

Prawns with fried cheese, barley shaped pasta

Put the barley shaped pasta into a small pan with salted water, bring to a boil and when tender, drain. Peal the prawns leaving...

Salmon and shrimp sheftalies

Mix all ingredients for tabbouli in a bowl and keep to one side so flavours can combine. Prepare the sheftalies: wash and soak the casing...