Herodotou highlights Cyprus banks’ challenges
Constantinos Herodotou, governor of the Central Bank of Cyprus, emphasized the need for Cypriot banks to seize the current favorable circumstances and address impending challenges during his speech at the 2023 ICPAC Mediterranean Finance Summit held in Limassol on Thursday.
In his address, Herodotou highlighted several challenges facing the banking sector, including digital transformation, cybersecurity, the green transition, and ESG considerations, according to a press release from the CBC. “These challenges require substantial upfront investment, cultural change, and collaboration among various stakeholders before reaping the benefits. The time is now for Cyprus banks,” Herodotou stated.
He emphasized that banks must leverage their strong capital position, ample liquidity, and significantly increased profitability to promptly transform their business models into sustainable and competitive ones that can effectively tackle the forthcoming challenges. “Complacency based on short-term profits is not a viable option. The way forward lies in sustainability through transformation. The CBC will continue to advocate for and support these efforts,” Herodotou stressed.
Referring to the recent shocks experienced by regional banks in the US, such as Silicon Valley Bank, Herodotou praised the eurozone’s mandatory supervisory restrictions as best practices for risk management. These regulations ensure ongoing management of concentration risks in assets and financing.
