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Banks disagree with Economist on investment loans

23/09/2003 13:10
The Economist Intelligence Unit may have encouraged the government’s effort to regulate investment loans, but this doesn’t mean that the banks have no longer reservations. EIU supports that a regulation of the investment loans would allow the commercial banks to solve the problem that affect negatively their balance sheets, avoiding at the same time to proceed to extravagant legal actions. However, General Manager of the Commercial Banks’ Association, Giorgos Hadjianastasiou told StockWatch that the enforcement of such a plan needs a thorough examination.

“We should keep in mind that the commercial banks are probably the only ones suffering the CSE bubble in 1999. It is a matter of time to overcome their problems”, Mr. Hadjianastasiou noted.

Regulation of investment loans is almost impossible

Mr. Hadjianastasiou said that only 20% of the investments in the CSE derive from other borrowing sources and expressed his reservations for the viability of the plan promoted by the government.

“It is technically impossible to be aware of which loans were raised for the purchase of shares in the CSE”, Mr. Hadjianastasiou said, urging the Finance Ministry to take seriously into account the public finances, which are “the worst in the history of Cyprus”. Mr. Hadjianastasiou reiterated that the banks disagree with any “legislative regulation” that would increase problems abroad.