March 13, 2015 / 2:50 PM / 4 years ago

Cyprus politicians call on central bank chief to resign

* Cypriot central banker accused of conflict of interest

* Also faces accusations over leaks of lawmakers’ debts

* Ex-colleague says she runs bank “like a little shop”

By Michele Kambas

NICOSIA, March 13 (Reuters) - Cypriot politicians called on the central bank governor on Friday to resign, accusing her of a conflict of interest, days after a media leak, which many believe came from the central bank, listed members of parliament who owe millions in loan arrears.

Central Bank Governor Chrystalla Georghadji has been fending off accusations for weeks about her estranged husband’s role in a legal dispute about a bank forced to wind down as part of Cyprus’s 2013 financial bailout.

But relations with lawmakers hit a new low after claims Georghadji was gathering ammunition against her political detractors, and a list of heavily indebted members of parliament appeared in at least one newspaper on Friday.

“The least the central bank board could do is resign,” Demetris Syllouris, head of parliament’s ethics committee, said.

She was referring both to the revelation that Georghadji’s husband worked as a lawyer for a Greek businessman in a legal battle with Cypriot authorities over the collapse of Laiki Bank in 2013, and to allegations that the the central banker was behind the leaked list of indebted politicians.

Georghadji, a member of the Governing Council of the European Central Bank, has denied any conflict of interest and said she would not step down.

“I will continue to serve this independent institution without prejudice, and with the interests of the country in mind,” she said.

Cypriot President Nicos Anastasiades, who appointed Georghadji in April 2014 for a five-year term, is due to meet her on Sunday evening. He will also meet party leaders and the auditor-general, who had expressed concerns about Georghadji’s family connections.

Cyprus was forced to wind down Laiki Bank as a condition for its 10 billion euro financial bailout in 2013. An administrator was appointed to attempt to recoup some assets for creditors.

Criticism against Georghadji has intensified since Thursday when an executive member of the central bank’s board quit, accusing her of incompetence.

“She is running (the central bank) like a little shop,” resigned board member Stelios Kiliaris said.

He said Georghadji had aimed to pressure her detractors by compiling a list of members of parliament who had loans in arrears at commercial banks.

“She was holding this list last Monday ... she made very serious innuendos about lawmakers who shouldn’t be looking at her own conflict of interest,” Kiliaris told state radio. At least one newspaper published the list on Friday.

It is a sensitive topic in a country with one of the largest non-performing loan ratios in Europe.

Parliamentary objections to a foreclosures law, designed to ease a bottleneck in banks reclaiming their debts, is holding up approval of a new tranche in international aid and Cyprus’s access to the ECB’s quantitative easing money-printing programme. (Editing by Robin Pomeroy)

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