Cyprus reforms tackle bad debt surplus

Author: Lizzie Meager | Published: 22 Dec 2015

The Cypriot government has passed a suite of legislative reforms in an attempt to confront the non-performing loan (NPL) problem plaguing its economy.

Included in the package is a new insolvency framework akin to the US Chapter 11 proceedings, laws regulating the sale and acquisition of loans and other credit facilities, and tax incentives and other facilities to support the proceeds.

These laws have been in gestation for some time - the insolvency statute was passed in April 2015, though tax incentives were voted in late last week - and their benefits will not be felt in the immediate future. But they are necessary steps towards getting the economy back on track following the infamous IMF bailout in 2013.

"The biggest problem with the Cypriot economy is...