Insider Economy Warnings over possible amendments to foreclosures procedures

Warnings over possible amendments to foreclosures procedures

Banks in Cyprus are sounding the alarm over attempts by opposition parties Diko, Green party and the Solidarity Movement to introduce legislation designed to slow down foreclosures.

But even though they have yet to get the required majority, an additional four draft bills by Edek and the Greens that were pending before parliament have also turned up now.  And at the same time, main opposition party Akel are preparing fresh legislation to protect of primary homes and the premises of a small business.

However, the Government, Central Bank of Cyprus and commercial banks strongly believe that if the law is amended financial stability and, by extension, the economy as a whole will be affected, according to insiders.

One 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.

On Thursday, the island’s Central Bank will most probably underline the imminent dangers from the proposed amendments before the parliamentary committee which extraordinarily meets to discuss them. In addition, Finance Minister Harris Georgiades is expected to express the government’s strong opposition.

Behind the scenes talks at the highest level have already been carried out in a bid to prevent the dire consequences. Phileleftheros has also been informed that banks are gathering data on the state of play of restructured loans to present it before parliament so as to prove that it is the wrong time for the bill to be amended.


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