On
Cyprus, ICP
Asks IMF
of PIMCO
Spat, IMF Says
BlackRock Not
Chosen
By
Matthew
Russell Lee
UNITED
NATIONS, July
30 -- When the
International
Monetary Fund
took
questions
about Cyprus
on an
embargoed
media call
about its
concluding
statement for
the 2014
Article IV
Consultation
and its
fifth review
of Cyprus’s
economic
program on
July 30, most
were
about
foreclosures.
The
IMF's Mission
Chief for
Cyprus Delia
Velculescu
said several
times
that the next
tranche of the
bailout is
unlikely in
September if a
law speeding
foreclosures
is not enacted
by then,
despite nearly
across the
board
opposition
from political
parties.
For
example,
deputy
spokesman
Athos
Antoniades
said. “The
Democratic
Party will not
vote on such a
sensitive
issue with a
gun to its
head.”
But
that is the
situation: no
law, no money.
Inner
City Press
asked
Velculescu
about the
discrepancies
between
PIMCO's
estimate of
what Cyprus'
banks needed,
and the lower
BlackRock
estimate that
has recently
come to light.
Velculescu
replied
that “at the
time of the
on-set of the
program the
requirement
was for an
independent
assess of
capital needs
in the
banking
sector.” She
said,
“Countries
have decided
of course on
individual
independent
assessors...
PIMCO was
chosen in
Cyrus.”
Backing
up
PIMCO and the
resulting
capitalization
framework (and
“bail-in”),
Velculescu
said, “we
believe the
assessment was
done
independently...
with
methodology
that were
specific to
the company
that undertook
it.”
Inner
City Press
asked, “So
BlackRock was
wrong?”
Velculescu
replied,
“BlackRock was
not chosen for
the assessment
that was
undertaken in
Cyprus.. the
recapitalization
was done under
PIMCO..
BlackRock was
the assessor
in another
country.”
So
is this a case
of two
financial
firms snarking
at each other,
on a
competitive
basis, or as
PIMCO acting
for those who
wanted to
justify
the bail-in
and the “gun
to the head”
that has come
afterwards?
We'll have
more on this.
, 
