Cyprus watch­dog asks UK to help with Laiki probe

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NICOSIA (Reuters) – Cyprus’s se­cu­ri­ties reg­u­la­tor will ask for as­sis­tance from Bri­tain in a probe into trans­ac­tions or­dered by now-de­funct Laiki Bank and con­ducted by Ger­many’s Com­merzbank, it said yes­ter­day. The Cypriot Se­cu­ri­ties and Ex­change Com­mis­sion (CySEC) is in- ves­ti­gat­ing trans­ac­tions made by Laiki and ar­ranged by Com­merzbank af­ter com­plaints from a lo­cal law­maker that the deals may have bro­ken laws pro­hibit­ing a com­pany from pur­chas­ing its own stock. Cypriot law­maker Irene Charalambides, who filed a com­plaint to Cypriot au­thor­i­ties and to Ger­man’s fi­nan­cial ser­vices reg­u­la­tor Bafin, as re­ported by Reuters last week, al­leges Com­merzbank sold two struc­tured prod­ucts that acted as ve­hi­cles for Laiki to buy stock in it­self and af­fil­i­ates. Com­merzbank has said it has no in­di­ca­tion of any wrong­do­ing by Com­merzbank re­lated to the se­cu­ri­ties. The bank de­clined to com­ment yes­ter­day. Laiki, once Cyprus’s sec­ond-largest bank, was taken into ad­min­is­tra­tion and wound down un­der terms of a 10-bil­lioneuro in­ter­na­tional fi­nan­cial as­sis­tance pack­age to Cyprus in March 2013. Some 4.3 bil­lion eu­ros in unin­sured de­posits ex­ceed­ing the EU thresh­old of 100,000 was wiped out. On Mon­day, Charalambides said she had also asked Bri­tain’s Fi­nan­cial Con­duct Au­thor­ity to as­sist in the probe be­cause, she said, the struc­tured prod­ucts were ar­ranged by a Com­merzbank branch in the UK. The FCA had no im­me­di­ate com­ment.

Fi­nan­cial in­sti­tu­tions.

The num­ber of banks and fi­nan­cial in­sti­tu­tions in the euro area con­tin­ued to de­cline in 2013, fall­ing by 3.8 per­cent from the fig­ure in 2012, the Euro­pean Cen­tral Bank said yes­ter­day. “On Jan­uary 1, 2014 there were 6,790 MFIs (mone­tary fi­nan­cial in­sti­tu­tions) res­i­dent in the euro area, com­pared with 7,059 on Jan­uary 1, 2013,” the ECB said in a state­ment. The drop was sharpest in Cyprus, where the num­ber of MFIs dropped by 26 per­cent, fol­lowed by a de­cline of 17 per­cent in Greece and 16 per­cent in Lux­em­bourg, the cen­tral bank cal­cu­lated.

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