Bank of Cyprus reinstated as an eligible counterparty by ECB
Bank of Cyprus Public Company Ltd (the “Bank”) announces that it has been reinstated as an eligible counterparty by the European Central Bank (ECB) for monetary policy operations. The reinstatement follows the Bank’s recapitalization through a bail-in of depositors* (a deposit-to-equity conversion) and the Bank’s exit from resolution**.
The combination of the restoration of counterparty status and the approval at the beginning of July for the use of bonds issued or guaranteed by the Republic of Cyprus will result in a reduction in funding from Emergency Liquidity Assistance (ELA), as the Bank will have access to direct funding from the ECB for monetary policy operations.
Furthermore, ECB funding will be under improved terms, given that the rate for main refinancing operations stands at 0,5%.
* As per the relevant decisions of the Eurogroup on 25th March 2013.
** As per the provisions of the Resolution of Credit and Other Institutions Law, 2013.