Cyprus’ Fin Min sees capital controls removed during 2014.
In business, there are the things you can control and the things you can’t control. While most of us in business spend time worrying about things we CAN control, it is often the other things which affect us most.
Case in point — this past Spring’s Cyprus banking crisis and subsequent EU bailout and Cyprus bank account haircut.
While Cyprus based retail forex and binary options brokers were largely unaffected by the crisis — no client money was subject to the dreaded bank ‘haircut’, and in any event most client money is held in banks outside the country — the goings on between Nicosia and Brussels did not exactly help Cyprus’ reputation as a global financing center.
And, not unexpected, we saw a number of Cyprus based brokerages either move to the UK, or at least attempt to rebrand as UK firms.
With global rating agencies now beginning to reverse course and raise their ratings on Cyprus — with ratings industry Standard and Poor’s (S&P) lifting Cyprus to B- as it sees lower risk of government default — things are looking up for the brokerage center. Cyprus’ Minister of Finance Harris Georgiades stated that the government is committed to the elimination of most of the country’s capital controls by January 2014 — with one key exception: the transfer of money outside of the country. That, however, should also be eliminated in stages beginning next year.
The result of all this is a remove of the Cyprus ‘taint’, and the continued growth of the Cyprus retail forex and binary industries, which create a lot of jobs in the country, particularly in the Limassol area. We expect to see forex and binary brokers continue to flock to Cyprus, which actually never abated even as the crisis unfolded earlier this year.
For more on the global Forex industry see the LeapRate-Dow Jones Forex Industry Report.