CBC urges banks to support businesses and households affected by COVID- 19 spread

The Central Bank of Cyprus (CBC), announced Monday that it expects banks to show flexibility in order to support both businesses and households that are expected to be adversely affected by the spread of COVID- 19, after the latest European Central Bank `s (ECB) decisions.

The CBC notes that the ECB`s decisions at the ECB Governing Council meeting, with the participation of Cypriot Governor Constantinos Herodotou, have resulted to additional liquidity in the eurozone`s financial system, expanded its QE programme that contribute to the maintenance of favorable liquidity conditions and the temporary release of capital and liquidity buffers.

It is also noted that the decisions announced by the ECB’s Single Supervisory Mechanism (SSM) created a capital buffer for Cypriot systemic banking institutions amounting to €1.3 billion.

“The CBC expects banks to use them, demonstrating the flexibility needed to support both businesses and households that are expected to be adversely affected by the spread of COVID – 19,” the CBC says, adding: “Bank support is expected include short-term restructuring of existing credit facilities as well as new short-term credit facilities for working capital purposes. “

At the same time, it is emphasized that the implementation of prudent banking practices should continue, so that the resilience of Cypriot banks will continue in the future.

In addition to the above measures, the CBC notes that it is working on additional measures, within the framework of its powers and responsibilities, which will be announced in the coming days.

In another circular, CBC calls on licensed credit institutions to adopt measures in the light of both their business needs and for the safety and health of their staff and clients.

“In light of the recent developments and the increasing spread of the coronavirus in Cyprus, you are urged to strictly implement the measures imposed by the government, as Cyprus is facing emergency situations,” the CBC says in a circular signed by the Governor Konstantinos Herodotou.

Source: Cyprus News Agency