FRANKFURT, March 20 Banks in Cyprus are not
solvent without them being quickly recapitalised, and the
European Central Bank can only provide liquidity to solvent
banks, ECB Executive Board member Joerg Asmussen was quoted as
saying on Wednesday.
The ECB said on Tuesday, after Cypriot lawmakers
overwhelmingly rejected a key element of a proposed bailout,
that it remained committed to providing liquidity within the
"We did not threaten (to cut off liquidity), but just
pointed out as a matter of fact that we can provide emergency
liquidity only to solvent banks and that the solvency of Cypriot
banks cannot be assumed if an aid programme is not agreed on
soon, which would allow for a quick recapitalisation of the
banking sector," Asmussen told German weekly Die Zeit in an
interview conducted Tuesday evening.
He was also quoted as saying that no other country in the
euro zone had a banking sector crisis comparable to Cyprus.