Discussion Forum – physical event
Friday 15 September 2023
Anatomy of the Cyprus Economic and Banking Crisis 2008-2013: An Assessment of What Really Happened and Why
Speaker: Mikis Hadjimichael, Economic and financial advisor, former senior advisor to the Chairman of the Board of the Bank of Cyprus, and former senior official of the Institute of International Finance (IIF) and the International Monetary Fund (IMF)
Chair: Ioannis Tirkides, Manager Economic Research at Bank of Cyprus, and President of the Cyprus Economic Society
Venue: Bank of Cyprus Cultural Foundation, 80 Faneromenis Street, Nicosia 1011
Abstract: More than ten years since the dramatic events of March 2013, there seems to be more consensus on the broad causes of the crisis. Yet, there is still no succinct and comprehensive account of what really happened and why. The discussion forum will address all the related questions, including the built-up of vulnerabilities and the weaknesses in the assessment of the related financial stability risks and in evaluating the proper timing and nature of the needed policy options. There were proximate causes to the crisis such as the bursting of the housing bubble and the impact of the Greek debt restructuring on the capital of the two largest banks in Cyprus, among others. The true origins, however, relate to the escalating vulnerabilities and distortions in the banking system; the ineffective bank supervision; the emergence of large budget deficits; the apparent lack of an appropriate framework for analyzing financial stability risks; the long delay by the government in seeking financial assistance from the troika and the government’s unwillingness to reach an agreement once a program request was finally made. These will be discussed.