NICOSIA - Central Bank governor Panicos Demetriades said yesterday he had never wanted to serve as the resolution authority charged with rescuing the island’s banks.
During a heated discussion in the House Finance Committee, Demetriades said he wished the task had been given to the Finance Ministry.
“What I did as a resolution authority was the most painful thing which will accompany me for the rest of my life,” he told MPs.
The law – which Disy is looking to amend – was rushed through the House in mid-March as a condition for the Eurogroup approving Cyprus’ bailout agreement.
MPs later said it gave too much authority to the Central Bank – giving it the power to wind down or administer banks, as it did with Laiki and the Bank of Cyprus respectively.
Yesterday, Disy suggested the resolution authority be made up of the Central Bank, the Finance Ministry and the auditor general.
Demetriades said any proposed change must first be reviewed by the legal service and consultations held with the Troika as it may put the whole rescue programme at risk.
“If the aim is to include two other authorities, the Central Bank does not believe this will be a functional framework and I would prefer to withdraw,” he said.
A problem may also arise with the three institutions, since the ‘reputation’ of the Central Bank will be used, but the decisions will be taken by the Finance Ministry.