Although housing loan interest rates continued to fall in December, business loan rates increased reversing an earlier downward trend according to the latest statistics from the Cyprus Central Bank.
Let's engage in some self-criticism, recognize our mistakes, and try to overcome the impasses, shedding old habits; and this goes for businesses and banks alike. It's time for us to change.
The Cyprus government must take a close look at the excessive household and business debt, and urgently raise the issue of possible debt write-offs, obviously under certain conditions and restrictions.
The recent announcement by the island's 'big three' banks to lower interest rates are a step in the right direction, but problems remain and these rate reductions are not enough as George Mountis explains.
Rather than establishing a separate Asset Management Company, it's likely that the Bank of Cyprus will set up a separate internal non-performing loan unit to pro-actively manage problematic loans.
A new directive for handling customers' debts has been issued by the Central Bank; however foreclosing on non-performing real estate loans and evictions is not in anyone's interests.
Although interest rates banks in Cyprus are paying their depositors have plummeted in recent times, the interest rates they are charging borrowers are increasing according to the European Central Bank.
Depending on decisions taken for the future of the Bank of Cyprus, all collateral for problematic loans that have been granted in recent years will be transferred to the new entity, which will sell or rent the assets to repay the loan.
As the Cyprus economy has been in a downward spiral for two to three years, it would be unfair to argue that the MoU with our international lenders is responsible for the fall in property values and demand.
Changes to the definition of non-performing loans to comply with European and IFRS accounting standards are necessary to restore Cyprus' credibility as a regional financial hub.
