The legal tender is the Euro. The banking system in Cyprus is well developed and organized, and has proved capable of coping with the diversified needs of the business community. It consists of 14 domestic banks, 29 International Banking Units (formerly “offshore banks”) as well as 1 representative office of a foreign bank, which are under the supervision of the Co-operative Credit Societies’ Supervision and Development Authority.
Banking arrangements and practices follow the British model. Banks maintain strong correspondent networks around the world and most of them subscribe to SWIFT, Reuters, Telerate and other services, enabling them to have easy access to the world banking network. They offer a wide range of services including insurance, leasing, hire purchase finance, factoring mutual fund management, investment and consulting as well as custody and asset management services.
Banks are generally in good shape and financially sound. They have responded to the demands of the liberalized financial environment in which they have been operating in recent years by making efforts to expand their sources of income as well as to streamline their operations and cut costs. Moreover, they have made significant investments in the field of technology and computerized systems which increase productivity and facilitate better utilization of resources.
Cypriots and foreigners residing on the island enjoy the benefits of a well developed insurance industry with all types of risk accepted mainly through agents and intermediaries. Currently there are 29 local insurance companies operating on the island, 13 international insurance undertakings, 5 European insurance undertakings operating in Cyprus under the freedom of establishment and 2 foreign insurance undertakings.
The Cyprus Stock Exchange commenced its operations in March 1996. It is a regulated exchange where all transactions concerning corporate and public securities are carried out. Such securities include stocks, bonds, and warrants. The main participants in the market are the members of the stock exchange (stock brokerage firms), the listed issuers and the investors. Transactions are electronically displayed and the trading and settlement systems are computerized.