Negative interest rates on cash deposits are here to stay for the foreseeable future. That was the message attendees took home from the inaugural Legal 500 GC Summit Cyprus. The summit took place on 20th February at the Landmark Hotel, Nicosia, and was attended by prominent ‘in-house’ lawyers from around the region.
Elias Neocleous & Co LLC was one of the major sponsors of the event and also arranged a lively panel discussion on the very topical subject of negative interest rates and their impact both on business and, on the Cyprus economy. The debate was moderated by Michael Pelosi, Legal Counsel within our Corporate and Commercial team. The distinguished panel members were:
- Dr Houry, Strategy and Business Development Manager, Eurobank
- Mr Leslie Manison, former IMF staff member and former advisor to several Cyprus finance ministers and also the Central Bank of Cyprus
- Andrea Kallis Parparinou, Partner, Corporate and Commercial team, Elias Neocleous & Co LLC
The general consensus of the debate was that negative interest rates were inevitable for corporate bank clients given that the European Central Bank was applying negative rates on bank deposits held with them. The impact of this on various players in the Cyprus economy was discussed, and several suggestions forwarded as to how best the situation could be addressed, both by individual businesses and, by the government. It was widely held that it could be a stimulus for investment but that bank deposit customers looking to obtain a return on their funds should adopt a cautious approach when evaluating project proposals. A synopsis of the discussions may be viewed here.