The Central Bank of Cyprus has announced the signing on 15 July 2011 of a Memorandum of Understanding with the China Banking Regulatory Commission. The Memorandum of Understanding follows the basic principles of cooperation between supervisory authorities, as formulated by the Basel Committee on Banking Supervision. It outlines the general framework of mutual cooperation and exchange of information between the two supervisory authorities, for the purpose of facilitating the performance of their supervisory function as well as for the effective supervision and regulation of credit institutions with a cross border presence, in accordance with the national laws and regulations of their countries.
In addition to smoothing the regulatory process, bilateral ties in the domain of banking supervision promote commerce by increasing understanding: mutual confidence in the regulatory process facilitates the development of business. In the past, the conclusion of a Memorandum of Understanding with a particular country has generally been followed by increased cross-border activity.