6 Apr 2013

Greek bond data missing from Cypriot bank

10:10 am on 6 April 2013

An investigation into what went wrong at the banks in Cyprus has found that important data about bond purchases is missing from computers at the Bank of Cyprus.

Cypriot media say the gaps were found in computer records studied by Alvarez & Marsal, a financial consultancy.

The bank had bought Greek bonds which turned into 1.9 billion euros of losses in the Greek debt crisis.

Depositors with more than 100,000 euros in the bank are now facing losses, expected to be about 60%.

The money taken from those accounts, and from deposits above 100,000 euros at Laiki (Popular) Bank, will be used by the government to contribute towards the bailout.

Strict capital controls are in force in Cyprus, limiting cash withdrawals to prevent a run on the banks.

The Cyprus Mail website says information provided by Bank of Cyprus was incomplete and data-deleting software was found on some computers there.

There were significant gaps in computer records for the period 2007-2010. The BBC reports it is not yet clear whether the wiping of records was accidental or deliberate. There were signs of mass deletion of data.

The Central Bank of Cyprus says that Alvarez & Marsal are now investigating Laiki too. It is the island's second largest bank, which is being wound up and folded into Bank of Cyprus.

The consultancy's report on Bank of Cyprus has been leaked to Cypriot media, but not yet published.

Other transactions

Besides the Greek bond purchases, Alvarez & Marsal also scrutinised Bank of Cyprus operations in Romania and Russia.

The consultancy's findings have been handed over to the Cypriot parliament and attorney-general Petros Clerides.

The BBC reports a special judicial panel has been appointed by the government to clarify what happened in the country's financial crash and pinpoint any wrongdoing.