Journal of Finance and Investment Analysis

The Rebuilding of the Cyprus Economy

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• Abstract

  Following the extra ordinary decision to bail in the unsecured depositors and restructure the two main banks and the near complete destruction of the country’s economic business model as an International Financial Centre, the author considers the changes necessary to rebuild the economy of Cyprus on solid and sustainable foundations. The effort should revolve around the need to build a capability to source funds and appraise capital investment projects, reform the banking sector so that banks will begin to perform their primary function as prudent lenders, remove economic distortions and other controls and constraints in the free market economy and last but not least, take such measures as to gradually instil a learning culture in the working population. It is recommended that Cyprus should establish a National Development Finance Agency to undertake the lead in appraisal and financing of key developmental projects and Public-Private Partnerships.