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Cyprus central bank chief resigns

March 10, 2014

NICOSIA, Cyprus (AP) — Nearly a year on from an acute financial crisis, Cyprus’ central bank governor resigned on Monday, a decision that brings an end to a protracted dispute with the president of the bailed-out country.

Neither the bank nor the government provided a reason for the decision by Panicos Demetriades, who will officially leave his post at the Central Bank of Cyprus on April 10.

However, in a statement, President Nicos Anastasiades thanked Demetriades for helping to prevent the country’s bankruptcy and stabilizing the banking sector.

Those warm words contrast sharply with criticism that Anastasiades has heaped on Demetriades over the past year since Cyprus became the fourth eurozone country to be rescued by its euro partners and the International Monetary Fund.

Anastasiades has previously slammed the central bank chief for “inadequately discharging his duties” and even threatened to begin proceedings to oust him — a move that prompted many in Europe to question the central bank’s independence from political affairs.

Among Anastasiades’ gripes was that Demetriades had delayed vetting board appointees to the board of the commercial Bank of Cyprus at a time when the lender needed strong leadership to get itself back on its feet.

The bank, the country’s largest, was at the epicenter of last year’s bailout. As a condition for a 10 billion euro ($13.9 billion) loan, authorities seized almost half of Bank of Cyprus deposits over 100,000 euros, shut down the second-largest lender and imposed across-the board capital controls to prevent a run. Bank of Cyprus depositors who had their money seized were issued shares in the lender.

Demetriades, an appointee of the country’s previous, communist-rooted president, had dismissed the attacks as attempts to undermine him. He strenuously insisted in numerous interviews that he would never resign so that he can be tagged as the “scapegoat” for the country’s economic woes.