The Rebuilding of the Cyprus Economy
Journal of Finance and Investment Analysis, Vol. 2, No.2, 2013, 107-123, ISSN: 2241-0998 (print version), 2241-0996 (online), Scienpress Ltd, 2013
17 Pages Posted: 2 May 2013
Date Written: March 25, 2013
Following the extra ordinary decision to bail in the unsecured depositors and restructure the two main banks and the near complete destruction of the country’s economic business model as an International Financial Centre, the author considers the changes necessary to rebuild the economy of Cyprus on solid and sustainable foundations. The effort should revolve around the need to build a capability to source funds and appraise capital investment projects, reform the banking sector so that banks will begin to perform their primary function as prudent lenders, remove economic distortions and other controls and constraints in the free market economy and last but not least, take such measures as to gradually instill a learning culture in the working population. It is recommended that Cyprus should establish a National Development Finance Agency to undertake the lead in appraisal and financing of key developmental projects and Public-Private Partnerships.
Keywords: Repayment capability, project evaluation, corporate lending, credit risk
JEL Classification: D61, G17, G21, G32, G33, H43
Suggested Citation: Suggested Citation