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NICOSIA, June 11 (Xinhua) -- Cyprus' President Nicos Anastasiades has made an appeal to the leaders of international lenders to urgently lift controls on bank transactions in a letter made public on Tuesday.
Restrictions1 on bank transactions were introduced with the aim of preventing a run on the banks after the Eurogroup and the International Monetary2 Fund forced a loss on major bank deposits to recapitalize the banking3 system on March 25.
It was part of a 10 billion euro bailout the eastern Mediterranean4 island requested to shore up its economy.
Anastasiades said the restrictions are drying up badly needed liquidity5 and instead of creating confidence in the banking system they are eroding6 it day by day.
He also said artificial measures such as capital restrictions may seem to prevent a bank run in the short term, but will only aggravate7 the depositors, who are liable to lose up to 60 percent of their deposits over 100,000 euros and have the rest of their money largely blocked in the biggest lender Bank of Cyprus.
"Maintaining capital restrictions for a long period will inevitably8 affect the local economy, will also affect the country's international business and will have an adverse9 impact on GDP," Anastasiades said.
His letter was addressed to the chiefs of the European Central Bank (ECB) and the International Monetary Fund and to the presidents of the European Council and the Eurogroup. A government spokesman said the Cypriot Finance Minister Haris Georgiades will address similar letters to all of his European Union counterparts.
The Central Bank of Cyprus said two weeks ago that the lifting of the restrictions were about to be announced, but a decree to that effect by the minister of finance was subsequently blocked by the troika -- the European Central Bank, the Eurogroup and the IMF -- as being premature10.
Anastasiades said the success of the entire bailout program for Cyprus depends upon the emergence11 of a strong and viable13 Bank of Cyprus, the only major bank left.
Under resolution measures, Bank of Cyprus is being recapitalized by using its depositors money and was also forced to merge12 its operations with Cyprus Popular Bank, which is in the process of being wound down after receiving Emergency Liquidity Assistance (ELA) by the ECB totaling 9.2 billion euros in just 12 months.
Anastasiades said in his letter that a possible long-term solution could be the conversion14 of part of Cyprus Popular Bank's ELA liability into long term bonds and the transfer of these bonds and corresponding assets into a separate vehicle.
"Still another solution could be the reversal of the Eurogroup decision in relation to the merger15 of good bank of Popular which including deposits up to 100,000 euros and 9.2 billion euros ELA liability into Bank of Cyprus," Anastasiades suggested.
He also demanded that Bank of Cyprus should exit resolution status without any further delay and should be granted eligible16 counter-party status by the ECB.
His letter came as most parliamentary parties came out in support of a suggestion for legal action to be taken against ECB chief Mario Draghi for allowing emergency liquidity assistance to be pumped into Cyprus Popular Bank at a time when it was evident it was becoming insolvent17.
Parliamentary leaders said allowing liquidity to be given to an insolvent banking institution was against ECB's rules.
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1 restrictions | |
约束( restriction的名词复数 ); 管制; 制约因素; 带限制性的条件(或规则) | |
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2 monetary | |
adj.货币的,钱的;通货的;金融的;财政的 | |
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3 banking | |
n.银行业,银行学,金融业 | |
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4 Mediterranean | |
adj.地中海的;地中海沿岸的 | |
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5 liquidity | |
n.流动性,偿债能力,流动资产 | |
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6 eroding | |
侵蚀,腐蚀( erode的现在分词 ); 逐渐毁坏,削弱,损害 | |
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7 aggravate | |
vt.加重(剧),使恶化;激怒,使恼火 | |
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8 inevitably | |
adv.不可避免地;必然发生地 | |
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9 adverse | |
adj.不利的;有害的;敌对的,不友好的 | |
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10 premature | |
adj.比预期时间早的;不成熟的,仓促的 | |
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11 emergence | |
n.浮现,显现,出现,(植物)突出体 | |
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12 merge | |
v.(使)结合,(使)合并,(使)合为一体 | |
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13 viable | |
adj.可行的,切实可行的,能活下去的 | |
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14 conversion | |
n.转化,转换,转变 | |
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15 merger | |
n.企业合并,并吞 | |
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16 eligible | |
adj.有条件被选中的;(尤指婚姻等)合适(意)的 | |
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17 insolvent | |
adj.破产的,无偿还能力的 | |
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