You are here

Auditor report on ELA

22/11/2016 09:32
The Office of the Auditor General of the Republic of Cyprus submitted on Monday to the Attorney General its report on the emergency liquidity assistance (ELA) by the Central Bank of Cyprus to the Cyprus Popular Bank (Laiki Bank).

An announcement by the Auditor General's Office says that the report is submitted as evidence in the framework of police investigations regarding the collapse of the Cyprus economy.

The report focuses on two main aspects, firstly on the assessment of the creditworthiness of the Laiki Bank and secondly on the evaluation of its collateral.

It is noted that in September 2011 the Central Bank of Cyprus began providing the Laiki Bank with ELA and the amount of the funds increased dramatically during 2011 and 2012. In the beginning of July 2012 ELA reached €9.8 billion. ELA remained on the same level until the bank`s collapse in March 2013.

On March 31 2015 Cyprus concluded a 3-year financial assistance programme using €7.3 billion of the total €10 billion bailout of its international lenders (IMF, ECB, EC), and returned to economic growth in 2015 following almost four years of contraction. The bailout saw 47.5% of deposits over €100.000 converted to equity to recapitalise the island`s largest lender, Bank of Cyprus, in the first application of the controversial bail-in tool, while Laiki Bank was entered in a liquidation process.