FOR IMMEDIATE RELEASE
FBME Bank placed under resolution; customers restricted to access accounts
Cyprus and Tanzania authorities respond to accusations and formal Notice of Finding from US based Financial Crimes Enforcement Network (FinCEN) to prevent a bankrun
APRIL 22, 2014 – The Federal Bank of the Middle East, known as FBME Bank, is placed under external management and operations of the bank are suspended. The Central Bank of Cyprus issued a decree by which it has placed the Tanzania based bank’s branch in Cyprus under resolution.
The decree published in the Gazette stated: “The purpose of the decree is the sale of the operations of the [FBME] branch with the aim of the protection of depositors.” Nicos Christodoulides, spokesman of the Cyprus government commented that “the decision to place the Cyprus branch of FBME Bank under resolution shows the commitment of the Cypriot independent institutions to safeguard financial stability.”
The coming three to six months are used to determine the question of guilt and to investigate the possibilities to re-open or officially close the bank. Within a few months, the banks’ customers should at least get access to a part of their funds. Additionally, if no solution is presented within a year, the formal closing procedures of the bank must start. A first step is to suspend the banks license, followed by the activation of the deposit protection scheme.
Legal Floris representative, Floris Alexander explains that actions taken by the Central Banks are in the best interest of the customers. “Liquidity of the bank is divided in short term and long term liquidity. When many customers come to the bank to claim their account balance at the same moment, the bank moves towards a liquidity gap. This liquidity gap inevitably results in bankruptcy, even though the bank is currently very liquid”.
It is at this stage uncertain to determine the seriousness of the case against FBME Bank. However, the Notice of Finding that was released by FinCEN and that triggered the decree by the central banks, leaves few clues. Once there is more news and legal procedures can start, Legal Floris notifies the public via our regular communication channels.
About Legal Floris
Legal Floris has extensive experience in fund recovery services for individual customers, businesses and institutional investors, duped by bank failures and investment fraud. The firm represents customers in bank failure cases like Lehman Brothers and Icesave, investment fraud like the Bernard L. Madoff Securities Ponzi scheme and mass claims to receive compensation from individual banks and investment firms for the sale of dubious products.
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Website: Legal Floris LLC