The Central Bank has introduced new provisions on reputational risk in its directive on internal governance of credit institutions, aiming to provide banks with clear guidance on identifying and managing reputational risks.
Central Bank Governor Christodoulos Patsalides, speaking at a House Finance Committee meeting during discussions on the 2025 state budget, said the amendment came into effect on November 29, 2024.
He noted that banks’ pricing policies have been a subject of intense public debate and could negatively impact their reputation. Regarding banking sector developments, the governor said that despite successive macroeconomic shocks in recent years, both Cypriot and European banks have proven resilient in terms of capital and liquidity.
On interest rates, Patsalides indicated there is room for reduction through ECB monetary policy, with a decision expected on December 12. He explained that the ECB’s position is to assess data continuously and favours avoiding sudden fluctuations.
The governor added that lending rates in Cyprus continue to show a downward trend across most loan categories, particularly for businesses, though he noted that Cyprus’s rate adjustment pace remains slower than the Eurozone average.
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