14/11/2014 11:26
Technocrats from Cyprus` international lenders, currently visiting the island, discussed on Thursday with party representatives the proposed six bills on insolvency.
Discussions focused on the protection of viable borrowers and businesses from repossessions without the consent of the lenders.
Party officials told CNA, the extend of protection especially for borrowers is not yet clear, as the Central Bank has not granted figures on the impact to the financial institutions from the implementation of repayment schemes.
As part of Cyprus` €10 billion bailout, the insolvency framework comprising six bills will be put into force in January 1 next year and is expected to set up a safety net to protect vulnerable groups from foreclosure of mortgaged property. The Memorandum signed between Cyprus and its international lenders stipulates that the parameters of the new repayment scheme for viable borrowers will be set and communicated once there is sufficient clarity on its impact on the financial institutions, and after consultation with the EC, ECB and IMF, and informing the ESM.
In the absence of such figures, party officials told CNA, the criteria for mandatory restructuring solutions without the consent of the bank, cover only person who lost 25% of their income in the last two years, whereas the size of the loan and the price of a primary residence pledged as collateral remains blank.
Other sources told CNA that the lenders have made clear that any loan restructuring solutions to be imposed on a lender should not be less than the money a bank would secure after selling a foreclosed collateral.
Party officials told CNA that the Troika technocrats aim to limit the scope of insolvency protection due to high non-performing loans.
Furthermore, the team assigned with drafting the insolvency framework intents to merge elements of the administration bill into the bill on examinership, that allows
the proposal of restructuring solutions for viable businesses.
The same sources told CNA that the bills comprising the insolvency framework are due to be tabled to the House of Representatives for approval by December 15.
As part of Cyprus` €10 billion bailout, the insolvency framework comprising six bills will be put into force in January 1 next year and is expected to set up a safety net to protect vulnerable groups from foreclosure of mortgaged property.
Discussions focused on the protection of viable borrowers and businesses from repossessions without the consent of the lenders.
Party officials told CNA, the extend of protection especially for borrowers is not yet clear, as the Central Bank has not granted figures on the impact to the financial institutions from the implementation of repayment schemes.
As part of Cyprus` €10 billion bailout, the insolvency framework comprising six bills will be put into force in January 1 next year and is expected to set up a safety net to protect vulnerable groups from foreclosure of mortgaged property. The Memorandum signed between Cyprus and its international lenders stipulates that the parameters of the new repayment scheme for viable borrowers will be set and communicated once there is sufficient clarity on its impact on the financial institutions, and after consultation with the EC, ECB and IMF, and informing the ESM.
In the absence of such figures, party officials told CNA, the criteria for mandatory restructuring solutions without the consent of the bank, cover only person who lost 25% of their income in the last two years, whereas the size of the loan and the price of a primary residence pledged as collateral remains blank.
Other sources told CNA that the lenders have made clear that any loan restructuring solutions to be imposed on a lender should not be less than the money a bank would secure after selling a foreclosed collateral.
Party officials told CNA that the Troika technocrats aim to limit the scope of insolvency protection due to high non-performing loans.
Furthermore, the team assigned with drafting the insolvency framework intents to merge elements of the administration bill into the bill on examinership, that allows
the proposal of restructuring solutions for viable businesses.
The same sources told CNA that the bills comprising the insolvency framework are due to be tabled to the House of Representatives for approval by December 15.
As part of Cyprus` €10 billion bailout, the insolvency framework comprising six bills will be put into force in January 1 next year and is expected to set up a safety net to protect vulnerable groups from foreclosure of mortgaged property.
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