Review Hari Stefanatos
Bank of Cyprus and defunct Cyprus Popular Bank have been fined by the Cyprus Securities and Exchange Commission (CySec), due to members of their Boards providing misleading information and manipulation through misleading financial figures over their investment in Greek bonds.
Administrative fines to Bank of Cyprus, members of its Board and senior executive officials, amount to €3.52 million, while the fines to defunct Cyprus Popular Bank, key member of its Board and senior executives, reach €4,06 million.
The problem with the bonds started in 2012 as part of a EU/IMF package to rescue the Greek economy, which resulted to a loss of €4.5 billion for the Cypriot banks or 25% of the island`s GDP. It was these loses coupled with the bank’s inability to raise capital from private sources that ultimately prompted Cyprus itself to request financial assistance.
As a result, on March 2013, Cyprus and the Troika of the EC, the ECB and the IMF agreed on a €10 billion package which included an unprecedented haircut of deposits over €100,000 to recapitalise the Bank of Cyprus, while Cyprus Popular Bank was wound down with a part of its operations (deposits below €100,000 and loans) absorbed by Bank of Cyprus.