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Banks risk reputation, clients by holding interest rates high, CBC Governor says

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Banks risk reputation, clients by holding interest rates high, CBC Governor says

Patsalides Cbc Governor Rates

    The Governor of Cyprus’s Central Bank, Christodoulos Patsalides, appealed to banks to consider their reputation risk and the impact of societal discontent over high lending rates.

    In a speech today, his first as the Central Bank chief, Patsalides emphasized the need for banks to be sensitive to social concerns.

    He acknowledged that Cyprus’s small economy faces imbalances, resulting in rapidly rising lending rates and slowly increasing deposit rates, creating an uneven playing field.

    Patsalides outlined the Central Bank’s vision to become a leading citizen-centric organization. Its mission, he said, is ‘to ensure price stability and support the state’s general economic policy, provided European obligations are met.’

    The Central Bank’ s goal, according to Patsalides, is to transform into a modern, flexible institution with better reflexes and a long-term approach. This, he said, would enable the bank to respond swiftly, actively, and adequately to current and future challenges.

    Regarding proposed laws to impose an extraordinary tax on banks’ windfall profits, Patsalides stated his disagreement, arguing that it would create further problems for investment attraction.

    The Central Bank gave its customary approval for the merger between Eurobank and Hellenic Bank, a move that Patsalides viewed positively, seeing no issues that would warrant negative thoughts. He added that the merger would enhance competition through the creation of a larger bank.

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