Former Cyprus Central Bank Governor Hits Back At Criticism Over CSE Bubble

by Lorys Charalambous, for LawAndTax-News.com, Cyprus

16 February 2004

Responding to comments made by the governor of the Central Bank of Cyprus Christodoulos Christodoulou, former Central Bank chief, Afxentis Afxentiou rejected the suggestion that the Central Bank should be held partially responsible for the crises which rocked the Cyprus Stock Exchange during its boom and bust period.

According to reports in the national media, Mr Christodoulou last week hinted to the House Finance and Watchdog Committees that his predecessor had exercised "loose" control over the jurisdiction's banks at the time of the stock market bubble's collapse.

However, speaking to the Politis news service, Mr Afxentiou argued that the Central Bank of Cyprus had carried out all of its supervisory responsibilities to the highest standard, and suggested that it was a "joke" to blame the banks for their disbursal of loans for investment purposes.

With regard to the latter point, he went on to explain that 80% of the cash invested on the CSE came from savings, rather than loans, arguing that consequently "one should look elsewhere for the culprits, not at the banks".

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