Insider Economy Lobbying to thwart new foreclosure legislation

Lobbying to thwart new foreclosure legislation

Twenty four hours before parliament begins debate on proposed legislation designed to slow down foreclosures in Cyprus and banks have begun lobbying to thwart such a development.

The five draft bills to come under discussion before the House Finance Committee on Thursday were sent by opposition parties Diko, the Greens and the Solidarity Movement a couple of weeks ago.

Commercial banks – and not only – strongly believe that if the law is amended financial stability and, by extension, the economy as a whole will be affected.

Bank representatives have already met with party officials from ruling Disy, main opposition Akel and centre Diko which is behind the amended bills. And they plan to meet with the leadership of all other parties supporting the proposed changes.

Banking sector insiders told Phileleftheros that if the foreclosures bill is amended, international rating firms will immediately downgrade the island’s economy.

And the European Central Bank will negatively review guarantees on borrowers’ loans, while problems will also arise with forecasts by credit institutions. In addition, there is going to be a risk to the capital adequacy and profitability of banks.

One insider also said that both Central Bank of Cyprus and the Ministry of Finance are looking into the repercussions on the island’s economy the proposed amendments will have, if approved.

The proposed bills have yet to get the required majority.


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