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Brussels watching developments in Cyprus over foreclosures

26/10/2022 07:49

Brussels is watching with interest the developments in Cyprus over a possible new suspension of the foreclosure framework.

According to CNA sources, while the reform of the non-performing loans management framework with the improvement of the operational environment for the Credit Acquiring Companies (CAC) and Credit Services was a significant milestone for the first disbursement under the EU’s Recovery and Resilience Fund, an effective foreclosure framework remains a very important instrument to maintain payment discipline support bank efforts to reduce NPLs and encourage borrowers to participate in loan restructuring.

So, the foreclosure framework is very - very important and we are watching with a lot of interest what is happening in Cyprus on this issue, the same sources added, noting that in general Cyprus should not “take legislative actions that would undermine the broader objective on NPLs and undermine payment discipline.”

According to the Central Bank of Cyprus, NPLs in the Cyprus banking system declined to €2.85 billion or 11.2% of total loans with problem loans sold to CACs outside the banking system amounts to €19 billion.