Cyprus Problem | Institutionalised Corruption


Cyprus Problem – Institutionalised Corruption

Institutionalised corruption is rife on the whole island of Cyprus. From ROC banks that are mismanaged to the point of criminality, then decide the ideal person to pay for their criminal negligence is the account holder foolhardy enough to bank with them.

NPLs (Non Performing Loans) to less than reputable businesses and private individuals has contributed to the collapse of one major Bank in the ROC and unless the Bank of Cyprus can do more than talk about plans to recapitalise, they too will be following Laiki Bank into the abyss.

Some banks in north Cyprus failed in 2001, causing Turkey to intervene at that time to help prop up this sector. Indeed who knows the true health of the banking sector in north Cyprus today, Bank Law 39/2001 put on the statute books because of this collapse, prohibits negative publicity about banks. NPLs are as prolific in north Cyprus as ROC but the detail seems to be kept under wraps.

Builders both sides of the island were allowed to borrow against property already sold to a third party and this is where the term ‘stealth’ mortgages comes from. The fraudulent borrower knows of the mortgage, the colluding bank knows of the mortgage, eventually the real owner gets to know of the mortgage, often when the bailiff is knocking at the door.

Pauline Read

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