Greece will need help once more, possibly twice: ECB's Coene

DISY deputy chairman Averof Neophytou yesterday launched a scathing attack on former Popular Bank strongman Andreas Vgenopoulos, whom many see as the main culprit for the lender’s problems.

The bank now needs to find some €1.5 billion by June 30 to bolster its capital as a result of its exposure to Greece.

On Friday, Vgenopoulos denied lobbying for the island’s bank regulatory framework to be relaxed and threatening to move the Popular Bank’s base to Greece if his demand had not been met.

Vgenopoulos said he wanted the framework “modernised” and was at loggerheads with former Central Bank governor Athanasios Orphanides who refused to grant the request.

Speaking on a morning news show on state broadcaster yesterday, Neophytou rubbished the modernisation claim, suggesting that if Vgenopoulos had been granted his demand, the bank’s losses would have been many times higher.

Neophytou said Vgenopoulos wanted the investments made by the bank’s subsidiaries not to be considered and thus demand from the parent company to hold additional capital.

And this was something adopted by the government which was trying to convince the parties, Neophytou said.

“Everyone was on their knees begging Vgenopoulos not to make good on his threat to move the bank’s base and they would grant his demand for ‘modernisation; of the regulatory framework,” the DISY number two said.

He said if someone like Vgenopoulos went to any other country, the thousands of affected people would have tried to have him arrested.

Neophytou also spoke of dodgy loans given by Marfin Egnatia Bank -- the lender that merged with the Popular Bank – whose only collateral are the shares of the Vgenopoulos-controlled Marfin Investment Group (MIG).

The loans were given to people to buy MIG shares, which were then used as collateral.

Some observers suggested that Vgenopoulos’ arrival was a show of support of sorts for the government, which has blamed Orphanides for the two big banks’ huge exposure to Greek debt.

“The government has no need of support on this,” said ruling AKEL MP Pambos Papageorgiou.

He said supervision was the Central Bank’s job – more specifically the board’s – but Orphanides had seized the opportunity “and we saw the results. It has nothing to do with the government.”

Papageorgiou said there is a need to investigate what happened, adding that the bankers’ responsibility is huge – much more than Orphanides’.

Source: Cyprus-Mail

By George Psyllides

Published on May 6, 2012

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