ECONOMY

Test results could end Cyprus capital controls

Results of stress tests on Cyprus’s banking sector have shown a re-establishment of stability in the banking sector, and could expedite the complete lifting of capital controls, Finance Minister Harris Georgiades (photo) said.

“It won’t be tomorrow but we shall commence the process of lifting the very last restrictions soon, in a gradual and staged manner,” Georgiades told Reuters.

Cyprus imposed capital restrictions to prevent a bank deposit flight in 2013 at the height of a tumultuous bailout from the European Union and International Monetary Fund.

Domestic restrictions have been dismantled, but large capital transactions abroad still have to be vetted.

Tests on three Cypriot banks on Sunday showed only one, Hellenic Bank, requiring 105 million euros in additional capital under an adverse scenario.

Two others, Bank of Cyprus and the Co-Op, although showing shortfalls last year, have addressed those issues in the meantime.

Georgiades said the fact the stress tests showed that a 1-billion-euro buffer was unnecessary for the financial sector materially pushed down projections of public debt.