The banking system in Cyprus has moved on from the crisis-resolution stage, according to Isobel von Koeppen Mertes, Advisor in the European Central Bank Market Operations Analysis Division, speaking that the Economist 9th Cyprus Summit on Monday.
She also noted that Cyprus has made “huge progress” when it comes to the stablisation of the banking sector and as such has moved successfully from ‘crisis-fighting mode’ to ‘crisis-resolution’.
Commenting on the upcoming eurozone-wide bank stress tests which the Bank of Cyprus will also be subjected to, Von Koeppen Mertes said “I wouldn’t be too worried about that”, noting that there were more concerns about banks elsewhere in the eurozone.
The details of the methodology stress test will only be known in January. While progress has been noted, von Koeppen Mertes said Cyprus should learn leassons from other countries, such as Ireland. Commenting on the wider financial assistance programme Cyprus has entered, Delia Velculescu, the IMF Deputy Unit Chief of the European Department, Delia Velculescu, said that the Cypriot authorities “have demonstrated strong resolve”.
She also noted that “much has already been accomplished in the relatively short time frame” to address significant vulnerabilities in banking sector, unwind the deterioration in public finances and implement structural reforms.
However, there was no “magic bullet” for bringing back growth, she said. Speaking at the same conference, the Minister of Finance, Haris Georgiades, said that there will be no deus ex machina for the Cyprus economy. His reference to the ancient Greek dramas, in which the gods would descend at the end of the play to sort out the mess, came in response to remarks by European Commission official Verwey, who said that the Cyprus financial crisis “reminds me of the story of Icarus.”
Georgiades said that there was “so much wisdom in Greek mythology and so little have we the Greeks learned from it”.