Cross-Border Bank Consolidation Benefits Cyprus, Patsalides Says
(Bloomberg)-According to the central bank chief of the country, cross-border combines between large European loans can help strengthen the Cyprus financial system.
“If this economy was positive for this economy, I would welcome more consolidation,” Governor Christodoulos Patsalides said in an interview in Frankfurt.
“The banking sector is very strong and it is good for banks to come to Cyprus from abroad and to control European banks by SSM,” he said.
“This kind of activity also increases competition for local banks that are important for the economy and the people of Cyprus,” he added.
Comments follow the latest purchases of Cyprus lenders by Greece’s best banks. Eurobank SA completed the purchase of Helen Bank PLC earlier this year, while in the process of taking over Alpha Bank SA Astrobank.
Alpha Bank joined further cross -border consolidation, increasing Italy’s Unicredit’s shares on the Greek lending to about 26%.
Patsalides emphasized the powerful capital position of the banks of his nation-a return from Cyprus in Europe’s sovereign-borch crisis more than a long time ago. This process also contained a painful bail in deposits.
The central bank chief introduced the economic flexibility of Cyprus. This year’s 3% growth estimate leaving European peers behind, while 3.5% of the gross domestic product is expected to have an expected budget surplus, unlike the deficits of the region.
According to Patsalides, who chose climate change, Cyprus is a very small and open economy, which is vulnerable to external shocks, such as a wider slowdown in European growth.
“This can affect tourism – droughts, forest fires,” he said. “These are real risks.”
At the beginning of this summer, two people died in a large forest fire on the island, while temperatures rose for days.
“Macro, imported risks – I am more concerned about a subject,” said Patsalides. “These are the main risks I’m worried about.”
-Help from Alexander Weber, Mark Schroers, Jan Randow and Lizzy Burden.
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