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

See all articles by Savvakis C. Savvides

Savvakis C. Savvides

Queen's University - John Deutsch Institute for the Study of Economic Policy

Date Written: March 25, 2013

Abstract

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

Savvides, Savvakis C., The Rebuilding of the Cyprus Economy (March 25, 2013). Journal of Finance and Investment Analysis, Vol. 2, No.2, 2013, 107-123, ISSN: 2241-0998 (print version), 2241-0996 (online), Scienpress Ltd, 2013, Available at SSRN: https://ssrn.com/abstract=2258787

Savvakis C. Savvides (Contact Author)

Queen's University - John Deutsch Institute for the Study of Economic Policy ( email )

Canada

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