Could Orphanides have headed off Marfin’s move to Greece?

IT WAS confirmed yesterday that Marfin Investment Group (MIG) Executive Vice-Chairman Andreas Vgenopoulos met Central Bank (CB) Governor Athanasios Orphanides last Friday, to inform him verbally of the plan to move the banking group’s headquarters to Greece.

Finance Minister Charilaos Stavrakis told state broadcaster CyBC yesterday that the matter of Marfin Popular Bank’s announcement was being handled by the Central Bank (CB) as part of its supervisory responsibilities. He reiterated his position that everyone, including the government, should fully respect its independent decisions.

Declining to comment on whether he thought the CB might have made mistakes in its dealings with Marfin banking group, Stavrakis said he continued to “have every confidence in the Governor and Central Bank, believing that they had handled this very complicated matter responsibly and with all seriousness.”

De did say that “there is an argument that exceptional supervision is being exercised by the Central Bank in Cyprus: a strict supervision that, clearly, has ensured the prosperity and viability of our banking system when compared to the losses suffered in several other European countries.

“This exceptional supervision can very often not suit the business plans of certain financial institutions.”

It has been an open secret that MIG was unhappy at having to withdraw its request to the CB to be allowed to raise its shareholding in MPB to 30 per cent. It has been suggested that CB Governor Orphanides had turned down MIG’s request despite indirect pressure from the government.

The final result is that within the space of two weeks, Orphanides has repeatedly deliver a strong reaffirmation of CB independence while presenting the CB’s 2008 Annual Report, and now Vgenopoulos has declared that he prefers the greater flexibility in share transactions offered by Greece’s banking supervisory authorities.

The Cyprus Mail is the only English-language daily newspaper published in Cyprus. It was established in 1945 and today, with its popular and widely-read website, the Cyprus Mail is among the most trusted news sites in Cyprus. The newspaper is not affiliated with any political parties and has always striven to maintain its independence. Over the past 70-plus years, the Cyprus Mail, with a small dedicated team, has covered momentous events in Cyprus’ modern history, chronicling the last gasps of British colonial rule, Cyprus’ truncated independence, the coup and Turkish invasion, and the decades of negotiations to stitch the divided island back together, plus a myriad of scandals, murders, and human interests stories that capture the island and its -people. Observers describe it as politically conservative.