After visits carried out earlier in the year to evaluate
supervision in the financial sector, the International Monetary
Fund recently published its Financial Sector Supervision Report
for Cyprus. The supervision of commercial banks, cooperative
credit institutions, the stock market and insurance companies
is carried out by four distinct entities: the Central Bank of
Cyprus, the Cooperative Societies' Supervision and Development
Authority, the Securities and Exchange Commission, and the
Superintendent of Insurance.
The IMF said that the supervision of insurance companies is
constrained by resource limitations and recommended that
further resources be made available. It also noted the progress
being made in improving the supervision of cooperative banks
and the stock market.
In the commercial banking sector, the IMF team concluded
that supervision and regulation are strong and in full
compliance with international standards.
Addressing the Sixth Interbalkan Forum of Banking
Associations shortly afterwards, the governor of the Central
Bank of Cyprus announced the issue of new guidance to banks
operating in Cyprus in preparation for the new EU Capital
Requirements Directive, which enters into force on January 1
2007. He told his audience that the Central Bank is confident
that banks in Cyprus "are prepared and ready to face
successfully the new risks as well as challenges posed by the
new global competitive environment."