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Cyprus banks to endure further losses in 2014

Debt-ridden Cyprus banks are in for a rough ride next year as a sharp recession stoked by international bailout terms hits consumers and businesses, the central bank governor said Monday. "As for the prospects of the banking sector in 2014, the sector will suffer further losses due to expected further deterioration in the macroeconomic environment," Panicos Demetriades told a parliament committee. "This is down to higher provisions (for bad debt), increased non-performing loans, rising unemployment, falling household incomes, lower company sales and profits," he said.

ECB discloses rules for emergency liquidity assistance

FRANKFURT (Reuters) - The European Central Bank disclosed on Friday the rules under which banks that are facing temporary liquidity problems can get emergency liquidity assistance (ELA) from their national central banks. The facility played a crucial role during the financial crisis in countries like Greece and Cyprus but the conditions under which national central banks were allowed to distribute ELA were not known to the public.

Banks to repay 5.2 billion euros of ECB crisis loans

FRANKFURT (Reuters) - Banks will return 5.199 billion euros ($7.10 billion) of crisis loans early to the European Central Bank next week, the ECB said on Friday, draining more liquidity out of the system than expected. By repaying the ECB's crisis funds early, banks are reducing the level of excess liquidity - cash beyond what lenders need to cover their day-to-day operations - in the system further, from a current 207 billion euros.

Asmussen rules out ECB rollover of Greek bonds

LUXEMBOURG (Reuters) - The European Central Bank and euro zone national central banks cannot roll over Greek government bonds as this would infringe a ban on financing governments, ECB Executive Board member Joerg Asmussen said on Monday. Earlier on Monday, Greek Finance Minister Yannis Stournaras had said the central banks had promised to roll over Greek bonds and they should do either that or make up the difference by other means.

Greek finance minister looks to bond rollovers to plug government's forecast financing gap

ATHENS, Greece - Greece's finance minister says the debt-hobbled country can cover a shortfall in its short-term financing needs by rolling over bonds held by European central banks and domestic lenders. Yannis Stournaras says the 11 billion-euro ($15 billion) gap for 2014-15 "is not very difficult to plug after all." Greece has depended on international bailouts since 2010. But when most of the rescue funds end next year, it will face shortfalls.

EU's Barnier warns against delay in talks on banking union

By Eva Taylor FRANKFURT (Reuters) - Europe should not delay signing off on a scheme for salvaging or shutting failing banks until it has changed basic EU law, the European Union's top regulatory official said on Friday in a veiled criticism of Germany. Speaking in the country's financial centre, Frankfurt, Michel Barnier underscored the need for swift action in finalizing plans to close or salvage failed banks - a crucial pillar in a framework to jointly deal with stressed lenders across the euro zone.

ECB raps Hungary for neglecting central bank independence

FRANKFURT (Reuters) - The European Central Bank has warned Hungary against tampering with central bank independence and pushed it to take the ECB's opinions more seriously. The ECB has been at loggerheads for some time with the Hungarian government, which has stacked the central bank - the MNB - with its supporters. The ECB shows no sign of backing off.

ECB's Praet: bold central bank actions risk slowing bank restructures

FRANKFURT (Reuters) - Commercial banks would have less reason to get back into shape were the European Central Bank to engage in too much monetary policy easing, ECB Executive Board Peter Praet said on Monday. Speaking at a conference in Brussels, Praet said the ECB had been able to counter the risk of disorderly deleveraging, but he warned against the central bank going too far.

ECB's Coeure warns of liquidity offered on too easy terms

TOULOUSE, France (Reuters) - Central banks must be wary of offering liquidity on such easy terms that it deters some euro zone banks from necessary restructuring, ECB Executive Board member Benoit Coeure said on Thursday. With excess liquidity in the banking system declining, many economists expect the European Central Bank to launch a new round of long-term cheap loans to encourage banks to lend to the wider economy.

ECB's Mersch says not too worried about south European banks

LUXEMBOURG (Reuters) - Commercial banks in debt-ridden southern Europe have gone through so much scrutiny that it is unlikely a new asset review would find big new trouble spots, European Central Bank Executive Board member Yves Mersch said on Monday. The ECB is scheduled to take over supervision of the region's banks in about a year's time, and a bank resolution mechanism should follow from the beginning of 2015.
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