Panicos Demetriades – the governor of Cyprus central bank – has resigned after reportedly experienced difficulties with the government and had been criticized for his handling of the country’s 10 billion-euro bailout.
There was no official statement on Monday about why Panicos Demetriades had stepped down.
Panicos Demetriades’ departure comes after Cyprus’ bailout was thrown into doubt when its parliament rejected a key part of the plan, and then passed it a day before the deadline was due to expire.
A spokesperson for the European Central Bank said: “The ECB takes note of the resignation of Panicos Demetriades who has been the governor of the central bank of Cyprus through very difficult times and played an important role in the implementation of the adjustment program.”
They added: “We count on a fruitful cooperation with his successor.”
Panicos Demetriades has resigned after being criticized for his handling of Cyprus’ 10 bn-euro bailout
Cyprus was nearly bankrupted after Greece’s financial crisis in 2010.
The country’s banks were hit heavily but its government did not have the funds to issue a bailout.
Slow economic growth and the stance of international lenders, who stopped offering loans, added to the pressure on the country’s finances.
Panicos Demetriades, formerly an economics professor at the University of Leicester, was appointed in May 2012 for five years by Cyprus’ former communist president, Demetris Christofias.
The former president has reportedly been blamed for policies which could have contributed to Cyprus’ crisis.
Last year Cyprus’ banking system was rescued from collapse by a 10 billion-euro bailout from the EU and IMF.
Current president, Nicos Anastasiades, said in September he might ask the country’s supreme court to rule on whether Panicos Demetriades could be sacked.
That was despite the ECB last year issuing repeated warnings to the Cypriot authorities not to interfere with the governor’s work.
Last month Cyprus’ lawmakers threw the bailout program, and the country’s next tranche of cash, into doubt over a bill allowing state firms to be privatized.
Yiannis Kypri, chief executive of Bank of Cyprus, the biggest bank in the country, has been ousted by the central bank, state media has said.
Yiannis Kypri was forced out by central bank governor Panicos Demetriades, who has himself come under fire for his handling of Cypurs’ banking crisis.
Yiannis Kypri’s removal came on the orders of Cyprus’ bailout lenders, the Cyprus News Agency reported.
The authorities are struggling to reopen the country’s banks on Thursday.
Yiannis Kypri, chief executive of Bank of Cyprus, the biggest bank in the country, has been ousted by the central bank
Bank of Cyprus is to be restructured and merged with parts of the failed number two lender, Laiki Bank.
The reasons for Yiannis Kypri’s sudden removal were not immediately clear.
The bank’s chairman Andreas Artemis handed in his resignation on Tuesday, but local reports suggested that the troubled bank’s board had rejected his resignation.
Panicos Demetriades, the central bank governor, was widely criticized on Tuesday for suggesting that Bank of Cyprus was going to be wound up in the same way as is planned for Laiki Bank. The apparently erroneous statement led to demonstrations and calls for his resignation from Bank of Cyprus staff.
On Tuesday, Panicos Demetriades said that “superhuman” efforts were being made to ready the banks for reopening.
They have been shut for more than a week as a controversial bailout was negotiated, which will see many depositors take losses.
“We have to restore the public’s trust in banks,” he said.
Meanwhile, Cyprus is planning to impose a weekly limit on cash withdrawals, among other restrictions on money transfers, even following the banks’ reopening.
The country’s draft capital controls include export limits on euros and a ban on cashing cheques.
In addition, fixed-term deposits will have to be held until maturity.
The restrictions are expected to be tighter for accounts at Bank of Cyprus and Laiki Bank.
Panicos Demetriades has confirmed that “temporary” capital controls will be imposed on the island, without giving details.
Banks have not been open since March 15. Their reopening had been expected after Cyprus agreed a deal with the IMF and the EU that releases 10 billion euros in support.
The Cypriot authorities had previously said all that but the biggest two banks would open on Tuesday, march 26, but they have remained shut while the finer details of capital controls are handled by the Cypriot central bank.