Banking (Amendment) Law of 2012
The new law contains provisions regarding the mechanism to settle disagreements between the Central Bank of Cyprus and the Central Banks of other EU member states concerning the supervision of credit institutions on a consolidated basis. It also provides for the exchange of relevant information between the Central Bank of Cyprus and the European Bank Authority, the European Systemic Risk Board and the competent authorities or organisations of third countries.
Also, for purposes of harmonization with Article 20 of EU Directive 2009/110/EC on electronic money institutions, the provisions of the basic law related to electronic money were amended, in order to be provided that, under the law, an electronic money institution shall be considered as a financial institution and not as a credit institution.
However, the main purpose of the amendment is to harmonise Cyprus law with Article 9 of EU Directive 2010/78. The said Directive amends numerous directives concerning the financial sector and regulates, inter alia, the powers of the European Banking Authority. It seeks to identify situations in which a procedural or a substantive issue of compliance with EU financial law needs to be resolved and the national competent authorities of EU member states are not able to resolve the matter on their own. In such a situation, the European Banking Authority shall be able to require that the competent authorities concerned, take specific action in order to settle the matter and to ensure compliance with EU Law with binding effects on the competent authorities concerned. The aim is to enhance citizen´s protection and to rebuild trust in the financial system.