THE BANKS under review are Bank of Cyprus, Marfin Popular Bank and Hellenic Bank. Moody’s said the action followed its decision on May 9 to place Greece on review for a possible downgrade, which suggested that the likelihood of a Greek sovereign debt restructuring could be rising.
The review of Cypriot banks reflected its concerns over heightened risks related to their sizeable exposure to Greek debt and significant lending to the Greek private sector. Moody’s said there were also funding risks which could arise in the event of a potential Greek debt restructuring.
According to Cyprus’s finance ministry, Cypriot banks hold about 5.1 billion Euros ($7.3 billion) worth of Greek bonds.
Moody’s said the exposure was estimated at about 68 percent of the rated banks’ aggregate pro forma Tier 1 capital.
“Although Moody’s recognises that the banks currently maintain solid capitalisation levels overall, our review will assess shock absorption capacity on a case-by-case basis under a stress scenario,” Moody’s said.
It said it also wanted to assess the Cypriot government’s willingness and ability to extend systemic support to its banking sector in the event of a possible Greek debt restructuring.
Moody’s cut Cyprus’s sovereign ratings two notches in February to A2 on concerns at the exposure of the banks to Greece and structural problems in the island’s economy.
Standard and Poor’s has cut Cyprus twice since last November, while Fitch has placed Cyprus on a negative watch for a possible downgrade. (Reuters)
Well they will just ignore it and carry on telling lies. Robbing every one who comes there way. After all they have got to fund there life style some how. They continue to bury there heads in the sand and hope things will go away, so they can get back to what they do best robbing people.