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ECB says Cypriot bill on leasing firms creates risk for central bank
October 20, 2015 / 3:20 PM / 2 years ago

ECB says Cypriot bill on leasing firms creates risk for central bank

FRANKFURT, Oct 20 (Reuters) - The European Central Bank warned on Tuesday that a Cypriot draft law giving the Central Bank of Cyprus expanded supervisory powers over leasing firms created a potential risk for the country’s national bank.

“The ECB considers that the draft law potentially creates financial risks for the CBC because it does not limit the CBC’s liability, as a public authority, for damages caused in the course of the exercise of its new supervisory powers,” the ECB said in a legal opinion.

It acknowledged, however, that the draft law may facilitate private debt restructuring by opening up the possibility to transform mortgage loans into real estate leases through sale and lease-back transactions, and potentially impact the resolution of non-performing loans in Cyprus. (Reporting By Francesco Canepa)

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