Cyprus Names New Bank Chief

NICOSIA – Cyprus’ President has appointed Auditor-General Chrystalla Georghadji as the bailed-out country’s new central bank governor.

A government statement said Georghadji will take up her new post April 11 and that European Central Bank chief Mario Draghi has been informed.

The appointment comes a day after outgoing Governor Panicos Demetriades resigned for what he said were mainly “personal and family reasons.”

President Nicos Anastasiades was highly critical of Demetriades’ handling of last year’s rescue deal with other eurozone countries and the International Monetary Fund. He had even threatened to begin legal proceedings to oust Demetriades for failing to do his job properly

But Anastasiades  rejected suggestions by political parties that Demetriades’ departure was engineered by the government.

Nearly a year on from an acute financial crisis, Cyprus’ Central Bank Governor resigned on March 10, a decision that brought an end to a protracted dispute with Anastasiades.

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

However, in a statement, 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.