"The market needs ethical banking," economist and member of the Fiscal Council, Marios Clerides, told CNA in connection with the initiative for a new Cooperative Bank, while emphasizing, however, the need to pay attention to governance issues.

When asked about the effort to establish a new Pan-Cyprian Cooperative Bank, Mr. Clerides said there are both positive and negative aspects. On the one hand, he said, “the market needs ethical banking, that is, banks that consider not only profits but also the borrower,” taking into account their customers’ ability to repay and not relying solely on collateral.

On the other hand, he continued, the problem with the Cooperative system lies in its governance. Specifically, he noted that with the “one member, one vote” principle—which is a fundamental tenet of the Cooperative system— “the weaknesses of the political system begin to creep in,” with each party “wanting to put its own people in place.”

Read more: The foundation has been laid for the new Cooperative Bank: When will the sale of shares begin?

Furthermore, he expressed concern about whether this governance model is fair—that an investor who invested €100,000 should have the same voting rights as someone who invested €100.

“Governance issues must be addressed, and the board of directors that will be appointed to this organization must be free of political agendas and must practice ethical banking,” he said.

Responding to the question of whether it is feasible for the Central Bank of Cyprus and the European Central Bank to issue a license, Mr. Clerides said that “they should try,” noting that there are cooperative banks in Europe, such as Rabobank. “The question is how we can make it work in Cyprus,” he pointed out.

The Pan-Cyprian Cooperative Society for Participation and Promotion of Cooperatives Ltd., whose primary purpose is to establish the Pan-Cyprian Cooperative Bank, will begin selling shares on July 22, following approval by the Cyprus Securities and Exchange Commission. This company will hold a 60% stake in the Pan-Cyprus Cooperative Bank, while 40% will be owned by the legal entities and companies of the Cooperative Movement, according to statements made on Friday at the first meeting held on the matter, following the CSE’s approval of the prospectus.

The Cyprus Securities and Exchange Commission approved the public offering of up to 42 million new shares with a par value of €1. Interested parties will be able to purchase shares through the Athlos Capital platform, with a minimum purchase of 100 shares.