Governor of the Bank of Finland Erkki Liikanen says it’s important that Cypriot banks be demerged in a controlled manner to protect tax payers and depositors.
Speaking on Yle’s Saturday morning television show ‘Ykkösaamu’, Liikanen asserted that banks must operate like businesses: both profits and losses should be private.
The Bank of Finland Governor praised the emergency legislation introduced by the Parliament of Cyprus to restructure the banking sector into good and bad banks.
“We need legislation that enables the fast demerger of banks in a few days. In this way the damage can be contained. We also need a system where shareholders and investors are the primary bearers of responsibility”, Liikanen commented, adding that legislation achieving such aims had now been created in Cyprus.
The Governor of the Bank of Finland assuaged depositors’ fears that the Cypriot crisis might spread to other parts of Europe, saying that deposits in European banks under 100,000 euros were safe.
Liikanen also asserted that Finland would not introduce a tax on bank deposits.