The IMF’s executive board, stated that while the country’s government has made progress with structural reforms it still needs more and the financial system remains vulnerable, with 54% non-performing loans.
It’s been merely a year and a half after the banking crisis in Cyprus engulfed the FX industry based on the small island bridging Europe with the Middle East. Since then local FX brokers and all companies related to finance have gone through a set of difficulties in maintaining confidence in their operations.
While many brokers based on the island resorted to switching their focus on to their FCA licenses and underlined that no customer funds were being held on the island, but with major global banks instead, these efforts might have to continue.
The Troika bailout and the European Central Bank’s Liquidity programs have stabilized the banking system in Cyprus, but major challenges remain. The Executive Board of the International Monetary Fund (IMF) concluded its surveillance program in the country (also called Article IV Consultation) and has outlined that the local government and the island’s financial system are still facing substantial challenges going forward.
With Cyprus being heavily dependent on Russian capital even before the crisis hit, the local economy took another blow this year from the escalation of geopolitical tensions between Russia and Ukraine, leading to another bout of challenges for the island economy addicted to Russian money.
The IMF’s board commended the efforts of the Cypriot government to liberalize domestic payment flows, consolidate public finances and engage in structural reforms, however they outlined the excessive level of non-performing loans (NPLs) which are stifling the economy. At the end of June, those stood at 54% of total loans and summed up to 143% of GDP.
The IMF highlighted the need for an effective and fair foreclosure regime, complemented by reforms of the legal-insolvency framework that facilitate debt restructuring and preserve the payment culture. In other words, bringing the two parties to the table for negotiations has to be facilitated if Cyprus is to address the rapidly deteriorating NPLs.
Companies in Cyprus are likely to face difficulties in obtaining cheap enough financing at a time when interest rates around the globe are at all-time lows due to the big share of NPLs in the banking system. This is resulting in an ever revolving conundrum which makes it increasingly difficult for local companies to operate.
On the plus side, many companies from the FX industry have already come to the island well financed and are not required to look for loans once they set foot on the island, so the IMF's concerns might not be relevant to foreign Exchange businesses coming to get established in Cyprus due to attractive tax rates and relatively cheap labor force.
As we can see below, non-bank corporations in Cyprus have a very tough time finding cheap financing these days.
Addressing this issue is highlighted in the IMF’s country report issued in tandem with the results of the surveillance program, “while progress has been made to stabilize the banking sector, addressing NPLs resolutely will be key to banks’ long-term viability and the resumption of credit and growth.”
“The cross-country experience suggests that this takes time, but also resolve to ensure that incentives are in place to facilitate the workout of NPLs. The reform of the legal regime for foreclosures and insolvency is a critical element,” the report concluded.
It’s been merely a year and a half after the banking crisis in Cyprus engulfed the FX industry based on the small island bridging Europe with the Middle East. Since then local FX brokers and all companies related to finance have gone through a set of difficulties in maintaining confidence in their operations.
While many brokers based on the island resorted to switching their focus on to their FCA licenses and underlined that no customer funds were being held on the island, but with major global banks instead, these efforts might have to continue.
The Troika bailout and the European Central Bank’s Liquidity programs have stabilized the banking system in Cyprus, but major challenges remain. The Executive Board of the International Monetary Fund (IMF) concluded its surveillance program in the country (also called Article IV Consultation) and has outlined that the local government and the island’s financial system are still facing substantial challenges going forward.
With Cyprus being heavily dependent on Russian capital even before the crisis hit, the local economy took another blow this year from the escalation of geopolitical tensions between Russia and Ukraine, leading to another bout of challenges for the island economy addicted to Russian money.
The IMF’s board commended the efforts of the Cypriot government to liberalize domestic payment flows, consolidate public finances and engage in structural reforms, however they outlined the excessive level of non-performing loans (NPLs) which are stifling the economy. At the end of June, those stood at 54% of total loans and summed up to 143% of GDP.
The IMF highlighted the need for an effective and fair foreclosure regime, complemented by reforms of the legal-insolvency framework that facilitate debt restructuring and preserve the payment culture. In other words, bringing the two parties to the table for negotiations has to be facilitated if Cyprus is to address the rapidly deteriorating NPLs.
Companies in Cyprus are likely to face difficulties in obtaining cheap enough financing at a time when interest rates around the globe are at all-time lows due to the big share of NPLs in the banking system. This is resulting in an ever revolving conundrum which makes it increasingly difficult for local companies to operate.
On the plus side, many companies from the FX industry have already come to the island well financed and are not required to look for loans once they set foot on the island, so the IMF's concerns might not be relevant to foreign Exchange businesses coming to get established in Cyprus due to attractive tax rates and relatively cheap labor force.
As we can see below, non-bank corporations in Cyprus have a very tough time finding cheap financing these days.
Addressing this issue is highlighted in the IMF’s country report issued in tandem with the results of the surveillance program, “while progress has been made to stabilize the banking sector, addressing NPLs resolutely will be key to banks’ long-term viability and the resumption of credit and growth.”
“The cross-country experience suggests that this takes time, but also resolve to ensure that incentives are in place to facilitate the workout of NPLs. The reform of the legal regime for foreclosures and insolvency is a critical element,” the report concluded.
UK Chancellor Jeremy Hunt Clashes with FCA over Controversial “Name and Shame” Policy
Network, Learn, Grow | FMAS:24
Network, Learn, Grow | FMAS:24
Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
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Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
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Don't miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!
Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
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Don't miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!
Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
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Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
📣 Stay updated with the latest in finance and trading!
Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today:
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Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
📣 Stay updated with the latest in finance and trading!
Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today:
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Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
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Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
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