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Tuesday, July 17, 2012
CYPRUS
WORLD
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Banks may have misled investors Bank chiefs admit staff may have wrongly pushed ¤1.4b in securities By Anthony Jackson
T
OP BANKERS conceded yesterday that bank staff may have committed mistakes and omissions in their effort to push high-yield securities on ordinary investors who have since seen the value plummet as a result of the Greek debt haircut. The admission came during an extraordinary session of the House institutions committee convened to examine whether the €1.4 billion worth of securities sold by banks was misrepresented to their investors. Depositors are claiming they were deceived by banks which had encouraged them to invest their deposits without having an authorised professional properly explain the risks involved. Popular Group CEO Christos Stylianides and Yiannis Kypri, Group CEO of Bank of Cyprus, both admitted that bank staff may have made mistakes in their effort to push the schemes. Meanwhile in a separate press conference Attorneygeneral Petros Clerides said the blame went beyond the banks. “We ought to have taken a closer look at the de-
cree, the House, the attorney general and the supervisors,” he said. Clerides called on parliament and the responsible state agencies to do their utmost and “find a way to help these people”. As a result of the Greek Sovereign Debt write-down, Cypriot banks including Popular Bank and the Bank of Cyprus have been hit with severe losses requiring €1.8 billion and €500 million respectively to recapitalise in accordance with regulatory requirements. This forced them to suspend interest payments on these high return investment products, causing their value to plummet leaving people with only a fraction of their initial investments. Andreas Trokkos, director of finance at the finance ministry, told MPs however that the decree approved last year by both the cabinet and parliament for the recapitalisation of the banks provided a forewarning to MPs that interest payments would cease since the European Central Bank doesn’t allow any payments on securities issued by a bank currently undergoing recapitalisation.
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A group of three British soldiers in front of the Olympic stadium, as they make their way to a security checkpoint at the Olympic Park entrances in London after soldiers were called in to help with security. FULL STORY PAGE 7
Cross-border criminals make $870 billon a year, says UN TURNOVER of cross-border organised crime is about $870 billion a year, more than six times the total of official development aid, and stopping this “threat to peace” is one of the greatest global challenges, a UN agency said yesterday. The most lucrative busi-
nesses for criminals are drug-trafficking and counterfeiting, the UN Office on Drugs and Crime (UNODC) said, launching an awareness-raising campaign about the size and cost of cross-border criminal networks. “Millions of victims are af-
fected each year as a result of the activities of organised crime groups, with human trafficking victims alone numbering 2.4 million at any one time,” UNODC said in a statement. The total estimated figure of $870 billion is equivalent to 1.5 per cent of the
world’s gross domestic product, it said, warning that crime groups can destabilise entire regions. “Stopping this transnational threat represents one of the international community’s greatest global challenges,” UNODC Executive Director Yury Fedotov said.