The presence of Finance Minister Haris Georgiadis before a committee investigating the causes of the collapse of the Cooperative Bank essentially closes the first round of proceedings and opens the second and last one, which will result in a verdict by the Arestis committee.
Georgiades said that ''the question posed is not how and why the Cooperative Bank was led to a dead end. The question is how it survived until 2013.’’
''Loan granting procedures were particularly problematic. Loans were handed out inexpedient without any due diligence or an assessment on the ability to repay. Loans were also granted to bank managers themselves and even to non-existent persons. In the 10 years before the peak of the crisis, from 2002 to 2012, loans tripled from 4.5 billion to 14 billion. Even worse, no one was monitoring if these loans were served or not. In fact, if there was sufficient collateral or a mortgage, the loan was always considered to be serviced, in spite of the fact that not even one euro had been paid.’’
The Finance Minister emphasized that state aid for 2013 did not eliminate the problems at the CCB but it did avert a bail-in. ‘’It was a political decision at the level of European institutions, which the President of the Republic himself had secured’’. ‘’So the state aid sealed a hole, a deficit.’’
Georgiades in his statement explained that the corporate governance procedures of the bank were non-existent. ‘’State aid was granted in order to save time, to start creating bank structures and to make it possible, in one way or another, to privatize the Cooperative Bank. This was the prescribed and absolutely correct course.’’