24/01/2012 14:23
The bill on the capital enhancement of the Cooperatives, which provides for the two-way guarantee between the Coops and the Cooperative Central Bank, was discussed by the House Commerce Committee and promoted to the plenary session.
According to Coop Development Superintendent, Constantinos Lyras, the bill falls within the framework of capital enhancement of the Cooperatives.
As the largest state creditor, with an exposure to Cypriot bonds of €1.4 billion, the Cooperative Movement must increase its capital by €627 million due to the impairment of the current value of bonds.
With the bill, capital will be enhanced by €100 million.
“Primarily, it will help Cooperatives to meet new supervisory and capital requirements especially due to the financial crisis and Basel III as well as the establishment of the European Stress Tests. At the same time, it will boost solidarity among the Cooperatives”, he stressed.
Cooperative Central Bank Director, Erotokritos Chlorakiotis said that the injustice with the one-way guarantee will stop.
“Unfortunately, there was an injustice with the one-way guarantee of the Cooperative Central Bank since it removed the remaining funds of the Coops, around €100 million per annum, from the capital base. Although they were surpluses of some Cooperatives, we were unable to co-calculate them on the basis of the CB instructions in our capital base”.
Chairman of Pancyprian Cooperative Confederation, Andreas Mouskalis said that the decision was unanimous.
According to Mr. Mouskalis, the business model of the Cooperative Movement is the best in the world despite the distortion efforts by the EU.
“There are EU legislations that try to distort the character of the Coops”, he added.
The bill on the “Cooperative Companies (Amendment Institutions of 2012)”provides for the change of the guarantee form from one-way to two-way.
The two-way guarantee will allow the inclusion of capital surpluses of the Coops in the calculation of the aggregated capital base, enhancing the capital base of the Cooperative Central Bank.
According to Coop Development Superintendent, Constantinos Lyras, the bill falls within the framework of capital enhancement of the Cooperatives.
As the largest state creditor, with an exposure to Cypriot bonds of €1.4 billion, the Cooperative Movement must increase its capital by €627 million due to the impairment of the current value of bonds.
With the bill, capital will be enhanced by €100 million.
“Primarily, it will help Cooperatives to meet new supervisory and capital requirements especially due to the financial crisis and Basel III as well as the establishment of the European Stress Tests. At the same time, it will boost solidarity among the Cooperatives”, he stressed.
Cooperative Central Bank Director, Erotokritos Chlorakiotis said that the injustice with the one-way guarantee will stop.
“Unfortunately, there was an injustice with the one-way guarantee of the Cooperative Central Bank since it removed the remaining funds of the Coops, around €100 million per annum, from the capital base. Although they were surpluses of some Cooperatives, we were unable to co-calculate them on the basis of the CB instructions in our capital base”.
Chairman of Pancyprian Cooperative Confederation, Andreas Mouskalis said that the decision was unanimous.
According to Mr. Mouskalis, the business model of the Cooperative Movement is the best in the world despite the distortion efforts by the EU.
“There are EU legislations that try to distort the character of the Coops”, he added.
The bill on the “Cooperative Companies (Amendment Institutions of 2012)”provides for the change of the guarantee form from one-way to two-way.
The two-way guarantee will allow the inclusion of capital surpluses of the Coops in the calculation of the aggregated capital base, enhancing the capital base of the Cooperative Central Bank.
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