Cyprus’ banking system does not have direct exposure to the ongoing global turmoil, Central Bank Governor Constantinos Herodotou said on Thursday, following a meeting with Diko leader Nikolas Papadopoulos.
Herodotou noted that the baking sector in Cyprus has significant liquidity and significant capital but stressed that there can be no complacency until the instability in Europe and in the world is overcome.
The latest developments, the Governor said, show how important is for banks and supervisory authorities to have prudent policies in order to build resilience in non-crisis periods.
Herodotou also commented on borrowing rates and non-performing loans (NPLs) in the Cypriot banking system, saying that he raised the matter of timely and quick restructurings with creditworthy borrowers, which is something that would benefit both banks and borrowers, as well as the economy.
The global economic turmoil began in the United States, when two large banks with significant exposure to the technology sector or to cryptocurrency failed, while another entered liquidation under financial distress.
The instability spread quickly around the world, ensnaring one of Europe’s biggest banking names in 167-year-old Credit Suisse, which was forced into a shotgun marriage with Swiss peer UBS Group UBSG.S to avert a wider crisis.
The collapses of Silicon Valley Bank and Signature Bank were the second and third-largest bank failures in the history of the United States.