The Central Bank of Cyprus needs to undergo a substantial reform to become a modern Central Bank through the adoption of a governance model that ensures flexibility, collegiality and more efficient operation, its Governor, Christodoulos Patsalides, has said.
He added that the Bank's current governance model is outdated and does not satisfactorily meet the requirements and obligations of a modern Central Bank, member of the Eurosystem.
According to a CBC press release, Patsalides outlined the proposal recently submitted to the President of the Republic and the Minister of Finance for the modernization of the CBC’s governance model.
He described the essential advantages of this model as being the collective, simple constitution of the supreme administrative body, as well as its executive capacity. These factors, he noted, allow for the functional distribution of powers and responsibilities and a more effective participation in decision-making within the Eurosystem institutions.
Patsalides also underlined that the proposal includes legislative amendments to build a governance structure that will allow the CBC to adequately respond to its institutional role and mission and to act with strategic insight, foresight and efficiency in the face of challenges.
The Governor further said that the proposed governance model is based on the lean and efficient structure of the Bundesbank.
Patsalides said that the proposed reform provides for a six-member Executive Board as the highest governing body in which decisions are taken collectively, by majority vote, with the Governor as the President of the Board and the Deputy Governor as the Vice-President.
He also said that the members of the Board have a seven-year, non-renewable term of office. Based on the provisions of the Treaty on the Functioning of the European Union, the Governor is a member of the Governing Council of the ECB, as is the case today.
(Source: CNA)
