Cyprus, troika agree on bank supervision, capital ratio

ATHENS Sun Nov 18, 2012 2:23am IST

ATHENS (Reuters) - International lenders negotiating a bailout with the Cypriot government have agreed on a key capital ratio for banks and a system for the sector's supervision, officials said on Saturday, signalling some progress in the talks.

Cyprus has been holding talks with European Union and International Monetary Fund to get financial aid after its banks were battered by its exposure to debt-crippled Greece.

The lenders, who were due to leave Cyprus on Sunday but are now expected to leave next week, agreed during talks on Saturday that both commercial banks and cooperatives would be overseen by the Central Bank, Finance Ministry and Central Bank officials said. Cooperatives were previously overseen by a separate authority.

They also set a core Tier 1 ratio - a measure of financial strength - of 9 percent by the end of 2013 for banks, which could then rise to 10 percent in 2014, the Finance Ministry and Central Bank sources said. They had previously been discussing setting the ratio at 8 percent.

But the two sides remain at odds over the amount needed to recapitalize banks, as well as over the lenders' demands for privatizing assets and cutting wages and pensions.

The size of the potential bailout - speculated to be anything between 11 and 16 billion euros and the bulk of it for banks - will be huge in proportion to the 17.9 billion euro economy, the third smallest in the euro zone.

(Reporting by Constantinos Tsindas; Writing by Deepa Babington; Editing by Alison Williams)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

REUTERS SHOWCASE

Earnings Season

Earnings Season

Reliance Q4 sales rise, refining margin narrows.  Read 

Innovative Solution

Innovative Solution

Turning smog into jewels - a Dutch designer's solution to Beijing's pollution.  Video 

Insider Trading

Insider Trading

Rajaratnam's brother loses bid to dismiss insider trading charges.  Full Article 

Literary Giant Dies

Literary Giant Dies

Mourning and memories in Gabriel Garcia Marquez's languid hometown.  Full Article 

S&P on India

S&P on India

S&P: India's ratings to depend on next govt econ, fiscal policies.  Full Article 

Ambitious Aim

Ambitious Aim

In green car race, Toyota adds muscle with fuel-cell launch.  Full Article 

Bond Market

Bond Market

A star abroad, RBI boss riles bond traders at home  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage