The European Central Bank (ECB) kept its three key interest rates unchanged on Thursday, as rising energy prices threaten to push inflation higher and weaken economic growth, hours after President Christine Lagarde announced she would step down before the end of her term.

The decision leaves the ECB’s deposit facility rate at 2.50 per cent, its main refinancing rate at 2.65 per cent and its marginal lending facility rate at 2.90 per cent, following September’s rate increase.

The Governing Council said the energy shock, driven by the conflict in the Middle East, was creating risks in both directions for the euro area economy, with higher prices threatening to fuel inflation while tighter financing conditions could weigh on economic activity.

“Energy prices have continued to rise, posing upside risks to the inflation outlook and downside risks to the growth outlook,” the ECB said.

The bank added that the full effects of the energy shock were still unfolding, although underlying inflation had remained broadly stable and wages had not yet shown a significant response.

However, it warned that the shock’s growing magnitude and duration, together with possible indirect effects and a second round of price and wage increases, were likely to push inflation higher and reduce growth.

Financing conditions have also tightened since the Governing Council’s previous meeting, a development the ECB expects to weigh on both inflation and economic activity.

The central bank reiterated its commitment to bringing inflation to its 2 per cent medium-term target, while stressing that its decisions would depend on incoming economic and financial data.

“The Governing Council remains well positioned to navigate the current elevated uncertainty,” it said, adding that monetary policy would be assessed on a meeting-by-meeting basis.

The ECB said it would consider the inflation outlook and the risks surrounding it, developments in underlying inflation and the strength of monetary policy transmission when deciding on interest rates.

It also stressed that it was not committing to a predetermined path for interest rates, leaving open the possibility of further changes as economic conditions develop.

The bank said its asset purchase programme and pandemic emergency purchase programme portfolios were continuing to decline at a measured and predictable pace because the Eurosystem was no longer reinvesting principal payments from maturing securities.

The Governing Council also reiterated that it was prepared to adjust all instruments within its mandate to ensure inflation stabilised at its target and to preserve the smooth transmission of monetary policy.

It added that its Transmission Protection Instrument remained available to counter unwarranted and disorderly market movements that posed a serious threat to the transmission of monetary policy across euro area countries.

Lagarde to leave in February

The rate decision followed the announcement that Lagarde would leave the ECB presidency on February 7, 2027, around nine months before her term was due to expire in October of that year.

The 70-year-old former French finance minister and International Monetary Fund managing director announced her departure after months of speculation about her future, with the decision coming as Europe faces economic uncertainty and politically sensitive elections.

“I leave this institution with a sense of good work done and an ECB that is fit for the future,” Lagarde said in a short video shared on social media.

Her departure is expected to allow European Union leaders to select a successor before France’s presidential election, in which far-right candidate Marine Le Pen has been favoured by opinion polls.

A source with direct knowledge of the matter said Lagarde had decided to leave so she could weigh in on political matters in France and internationally, something she was expected to avoid while leading the ECB to protect the institution’s independence.

European Council president António Costa said the process to appoint her successor would begin immediately and proceed without delay.

Euro area saving falls

Separate ECB figures published earlier this week showed that euro area net saving declined to €868 billion in the four quarters to the second quarter of 2026, down from €895 billion in the four quarters to the previous quarter.

Net saving represented 6.7 per cent of the euro area’s net disposable income.

Net non-financial investment also fell to €599 billion, equivalent to 4.6 per cent of net disposable income, mainly because non-financial corporations reduced their net investment.

Despite the decline in saving and investment, the euro area’s net lending to the rest of the world remained broadly unchanged at €312 billion, as the two measures fell by similar amounts.

Household net lending decreased to €703 billion from €715 billion, representing 5.4 per cent of net disposable income.

By contrast, net lending by non-financial corporations increased to €127 billion from €103 billion, equivalent to 1 per cent of net disposable income.

Financial corporations moved from net borrowing of €3 billion to net lending of €9 billion, or 0.1 per cent of net disposable income.

General government net borrowing increased, making a more negative contribution to the euro area’s overall net lending position, at €528 billion, equivalent to 4 per cent of net disposable income.

The figures also showed that household debt declined relative to income, with the debt-to-income ratio falling to 80.3 per cent in the second quarter of 2026 from 80.5 per cent a year earlier.

Non-financial corporations’ consolidated debt-to-GDP ratio also edged down, reaching 66.1 per cent in the second quarter, compared with 66.4 per cent a year earlier.

Christine Lagarde is stepping down as president of the European Central Bank (ECB) nine months earlier than expected, bringing forward a leadership contest at a time when renewed inflationary pressures and rising borrowing costs are causing fresh concern for businesses and households across Cyprus and the eurozone.

The ECB confirmed on Thursday, October 29, that Lagarde will leave her post on February 7, 2027, rather than complete her eight-year term, which was due to expire at the end of October next year.

In a video statement published on the bank’s social media, Lagarde personally confirmed her departure, explaining that she had informed fellow policymakers and ECB staff of her decision.

Reflecting on her seven years in Frankfurt, she described her time at the institution as “a great pride and a huge privilege”, thanking those who had helped fulfil its mission in Europe.

That mission, she explained, was to “be a rock, be solid, deliver price stability, financial stability”, before adding that she would leave with “a sense of good work done and an ECB that is fit for the future.”

According to the official announcement, Lagarde also informed European Council president António Costa of her decision earlier on Thursday, with the ECB’s Governing Council thanking her for her service and giving her a lengthy standing ovation.

Her departure comes at a particularly difficult time for the European economy, with renewed inflationary pressures, higher energy costs and growing concerns over borrowing conditions putting the ECB’s interest-rate decisions back in the spotlight.

For Cyprus, those decisions directly affect mortgage repayments, business financing and deposit returns, making the choice of Lagarde’s successor particularly relevant to the island’s banking sector and wider economy.

The announcement also comes on the same day as the ECB’s latest monetary policy meeting, with policymakers expected to keep the deposit rate unchanged at 2.5 per cent, despite growing speculation that further increases could follow before the end of the year.

Rising oil prices, linked to the continuing Middle East conflict and disruptions to energy supplies, have complicated the inflation outlook, leaving the ECB balancing the need to control prices against the risk of putting further pressure on economic growth.

Lagarde, who took over from Mario Draghi in November 2019, has already overseen one of the most demanding periods in the bank’s history.

Her presidency began shortly before the Covid-19 pandemic and subsequently saw the eurozone confront the economic consequences of Russia’s invasion of Ukraine, soaring inflation, the energy crisis and an aggressive series of interest-rate increases.

As the Financial Times reports, her seven years at the ECB have been dominated by exceptional economic and geopolitical crises, including the pandemic, war in Europe, a major inflation shock and trade tensions with the United States.

The newspaper also recalled that Lagarde, now 70, had previously admitted believing she would serve for five years rather than eight when she accepted the position following discussions with French president Emmanuel Macron.

Her early exit follows months of speculation about her future, with the World Economic Forum emerging as a possible next destination. According to the Financial Times, she has been in discussions about taking over as its chair, although no appointment has been confirmed.

Lagarde will become only the second ECB president to leave before completing a full term, following the bank’s first president, Wim Duisenberg, who departed after five years.

Attention is now turning to who will replace her, with former Dutch central bank governor Klaas Knot and former Bank of Spain governor Pablo Hernandez de Cos among the leading names being discussed.

The Financial Times reports that the Dutch government is backing Knot, while Spain supports Hernandez de Cos, who currently serves as general manager of the Bank for International Settlements.

Their potential appointments come at a time when the ECB is preparing for a broader change in its senior leadership.

Executive Board member Isabel Schnabel is leaving on January 3, 2027, a year before the end of her term, to take up a senior position at the International Monetary Fund, while ECB chief economist Philip Lane’s term expires in May.

The three departures mean European leaders will have to settle several important appointments within a relatively short period, raising questions about the future balance of views within the ECB’s six-member Executive Board.

The timing is politically significant, too. By leaving in February, Lagarde gives European leaders an opportunity to agree on a successor before France’s presidential election in spring 2027.

Costa has confirmed that the process of choosing a new president will begin immediately, with the European Council responsible for making the final appointment.

Under the EU’s appointment rules, any candidate must secure the support of at least 16 of the eurozone’s 21 member countries, representing no less than 65 per cent of the currency area’s population.

The process also involves consultation with the European Parliament and the ECB’s Governing Council before the European Council makes its decision.

Cyprus will have a say through its participation in the eurozone, while Central Bank of Cyprus (CBC) governor Christodoulos Patsalides sits on the ECB’s Governing Council, which is responsible for setting monetary policy across the currency bloc.

A change of president does not automatically mean a change in interest rates, since monetary policy decisions are taken collectively. Nevertheless, the next ECB chief will inherit an institution facing difficult choices over inflation, economic growth and the cost of credit, with the latest rise in energy prices making those decisions all the more complicated.

Eurobank has completed its €813 million acquisition of the remaining 80 per cent of Greek life insurer Eurolife Life Insurance, bringing its ownership to 100 per cent, while the sale of a 45 per cent stake in its Cypriot non-life insurance subsidiary to Fairfax Financial Holdings is expected to be completed by the end of 2026.

The bank announced the completion on Thursday, following the receipt of the necessary regulatory approvals and the fulfilment of the relevant closing conditions.

The transaction involved the acquisition of 80 per cent of Eurolife FFH Life Insurance Single Member Société Anonyme Company, which operates under the name Eurolife FFH Life Insurance SA, from entities controlled by Fairfax Financial Holdings Limited.

The deal follows earlier announcements made in October of 2025, and May of 2026, and represents a significant step in Eurobank’s strategy to expand its insurance business and diversify its sources of revenue.

With full ownership of Eurolife Life, one of Greece’s leading life insurance companies, the bank aims to strengthen its position in the insurance market and further develop its bancassurance activities, which combine banking and insurance services.

Eurobank said the acquisition would allow it to build on Eurolife Life’s established market position and distribution network.

The bank had announced in May that the consideration for the acquisition amounted to approximately €813m, with the transaction expected to be completed during the third quarter of 2026.

The completion announcement did not provide an update on the previously disclosed estimated impact of the acquisition on the group’s profit and loss account or its common equity tier 1 (CET1) capital ratio, which measures a bank’s financial strength.

The sale of part of Eurobank’s Cypriot insurance business remains pending, with the bank expecting to complete the disposal of a 45 per cent stake in ERB Asfalistiki Limited to Fairfax affiliates by the end of 2026.

The transaction remains subject to the outstanding regulatory approvals and other closing conditions.

Eurobank announced the planned sale in May, when it said the deal was expected to generate cash consideration of approximately €55m.

The disposal concerns ERB Asfalistiki, the group’s non-life insurance subsidiary in Cyprus, and forms part of the wider arrangements involving Fairfax.

The May announcement had indicated that the agreement relating to the Cypriot business was expected to be signed in the following weeks, subject to the necessary corporate approvals.

The completion of the Greek life insurance acquisition now gives Eurobank full ownership of Eurolife Life, while the separate transaction involving its Cypriot non-life insurance business remains outstanding.

CySEC warns investors about AI-generated scams and false advice

The Cyprus Securities and Exchange Commission (CySEC) has stepped up efforts to protect investors from online scams and artificial intelligence-generated investment fraud, as part of its participation in World Investor Week 2026, while continuing financial education programmes in schools across Cyprus until December.

The regulator on Thursday announced that it took part in the international initiative for the eighth consecutive year, focusing on emerging digital investment risks, strengthening financial resilience and helping the public make informed investment decisions.

World Investor Week is an initiative of the International Organisation of Securities Commissions (IOSCO), which seeks to raise awareness of investment risks and promote responsible investing.

CySEC’s campaign placed particular emphasis on fraudulent practices involving misleading online advertisements, false investment recommendations and deceptive content generated using artificial intelligence (AI).

The regulator stressed the importance of staying informed, carefully assessing investment opportunities and checking the credibility of investment service providers before committing money.

Public awareness activities included daily targeted posts on CySEC’s social media accounts, as well as appearances on television news and current affairs programmes.

The commission also encouraged the investment firms and other entities it supervises to help spread the campaign’s messages.

As part of the initiative, CySEC produced a Smart Investor Booklet outlining the main messages of World Investor Week 2026, alongside an investor guide titled ‘Knowledge, Protection and Safer Investment Decisions’.

Both publications form part of the regulator’s wider financial education programme.

School lectures to continue until December

Financial education for younger people remains a central element of CySEC’s work, with the sixth cycle of its school lectures already under way and scheduled to continue until December 2026.

The commission is also planning lectures at universities, extending its educational activities beyond the annual World Investor Week campaign.

The presentations cater for primary school pupils, lower and upper secondary school students, and those attending technical schools.

To support the programme, CySEC has developed new educational material tailored to different age groups and educational levels, together with a presenter’s guide intended to ensure that key financial education messages are delivered consistently and effectively.

The aim is to equip school and university students with essential financial knowledge and use practical examples to help them identify investment risks and protect themselves against potential fraud.

The initiative also seeks to strengthen students’ critical thinking skills when evaluating information and investment proposals encountered online, where misleading claims and fraudulent offers can be difficult to distinguish from legitimate opportunities.

CySEC said the educational programme had become an established part of its activities, with officials having visited 88 schools across Cyprus and provided financial education to more than 3,400 students during the previous five cycles of lectures.

Education seen as essential to investor protection

“Investment fraud is becoming increasingly sophisticated and difficult to detect,” said CySEC chairman George Karatzias, stressing that protecting investors required more than regulatory supervision.

“This is why investor protection requires not only effective supervision but also continuous public awareness and education,” he added.

“Through our initiatives, we aim to strengthen people’s ability to recognise risks and make informed decisions, while systematically investing in the financial education of the younger generation,” Karatzias continued.

The regulator said financial education and investor protection remained longstanding priorities, with its initiatives aligned with Cyprus’ National Strategy for Financial Literacy.

CySEC also actively contributes to the work of the Cyprus Financial Literacy and Education Committee (CyFLEC), which supports efforts to improve financial knowledge and understanding across the population.

Information and educational resources, including the material developed for World Investor Week 2026, are available through CySEC’s Financial Education Portal.

Alpha Bank has increased its share capital to €654.35 million following the exercise of employee stock options in September 2026, bringing its total number of shares with voting rights to more than 2.25 billion.

The lender confirmed the change this week, following a share capital increase approved by its board of directors on September 30 and registered with the General Commercial Register on October 13.

The increase resulted from the implementation of the bank’s stock options plan, under which eligible participants exercised options granted to them during the September 2026 exercise period.

Following the increase, Alpha Bank’s share capital stands at €654,351,248.35, divided into 2,256,383,615 ordinary shares, each carrying voting rights and having a nominal value of €0.29.

The shares are registered and held in dematerialised form, meaning they exist electronically rather than as physical share certificates.

The bank said the disclosure was intended to help shareholders and holders of voting rights calculate the thresholds at which acquisitions or disposals of significant shareholdings must be reported under Greece’s financial market transparency legislation, specifically Law 3556/2007.

The announcement was issued in accordance with Article 9, paragraph 5, of that law, which requires companies to disclose changes in their share capital and voting rights to enable investors to determine whether their holdings cross relevant reporting thresholds.

Euro area businesses faced tighter bank lending conditions and rising borrowing costs in the third quarter of 2026, with banks making loans less available relative to companies’ financing needs, according to the European Central Bank’s (ECB) latest Survey on the Access to Finance of Enterprises.

The survey found that firms reported a further net increase in bank loan interest rates, while more businesses also faced higher collateral requirements and expected external financing to become less available over the following 3 months.

A net 46 per cent of firms reported an increase in bank loan interest rates, up from 42 per cent in the previous quarter.

Large companies reported increases more frequently, with a net 55 per cent indicating higher rates, compared with 41 per cent in the second quarter.

Among small and medium-sized enterprises (SMEs), the corresponding figure fell to a net 38 per cent from 43 per cent.

Other financing costs, including charges, fees and commissions, also increased, with a net 27 per cent of firms reporting higher costs, down from 31 per cent in the previous quarter.

Meanwhile, a net 14 per cent reported an increase in collateral requirements, up from 10 per cent previously, indicating that businesses were being asked to provide more security when borrowing.

Bank loan availability deteriorated more sharply than companies’ financing needs, widening the gap between the amount of credit businesses wanted and what they could obtain.

A net 5 per cent of firms reported that bank loan availability had declined in the third quarter, compared with a net 1 per cent in the previous quarter.

Both SMEs and large companies reported tighter availability, although the deterioration was particularly pronounced among larger businesses.

For SMEs, the net share reporting a decline in availability stood at 5 per cent, compared with 4 per cent in the second quarter.

Among large firms, the figure reached 6 per cent, reversing the previous quarter’s net 4 per cent reporting improved availability.

At the same time, a net 2 per cent of firms reported a decrease in their need for bank loans, compared with a net 2 per cent increase in the previous quarter.

Developments differed according to company size, with SMEs reporting broadly unchanged financing needs, at a net 1 per cent compared with 2 per cent previously.

Large firms, however, reported a net 6 per cent decrease in their need for bank loans, reversing a net 3 per cent increase in the previous quarter.

The resulting bank loan financing gap indicator stood at a net 2 per cent, down from 3 per cent in the previous survey round.

The indicator measures the difference between changes in firms’ demand for bank loans and the availability of such financing, with a positive reading signalling that availability is deteriorating relative to needs.

Looking ahead, more firms expect the availability of external financing to decline over the next 3 months.

Businesses continued to identify the general economic outlook as the main factor restricting access to external finance, with a net 31 per cent reporting a negative impact, up from 29 per cent in the previous survey round.

Large companies were more pessimistic than SMEs, with net shares of 35 per cent and 29 per cent respectively saying the economic outlook was constraining their access to finance.

The impact of firms’ own business prospects, measured through sales and profits, remained negative, although the net share reporting this effect eased to 9 per cent from 10 per cent in the previous quarter.

By contrast, companies’ capital positions and creditworthiness continued to have a positive impact on their access to external financing.

The ECB also cautioned that significant changes to the survey sample make some of the latest results more difficult to interpret, particularly those relating to firms’ expectations for selling prices, input costs and inflation.

First-time respondents accounted for the majority of the sample in this round, making comparisons with previous results less straightforward.

Among firms that participated in both the latest survey and the previous round, the increase in expectations for selling prices was limited.

However, selling price expectations rose significantly when the full sample was considered.

A similar pattern emerged in inflation expectations, with median expectations remaining broadly unchanged among businesses that participated in both rounds, but increasing significantly across the full sample.

Firms’ assessment of the risks surrounding their inflation outlook over the next 5 years remained broadly unchanged.

The report presents the main findings of the 40th round of the Survey on the Access to Finance of Enterprises in the euro area.

The survey was conducted between August 26 and October 2, 2026, and covered 12,822 enterprises. Of these, 11,917, or 93 per cent, had fewer than 250 employees.

Around half of the firms were asked about changes in financing conditions and other developments between July and September 2026, while the remainder were asked to assess changes over the longer period from April to September.

Businesses were also asked about their expectations for euro area inflation, selling prices and other costs.

The findings point to continuing pressure on companies’ access to credit, as higher borrowing costs and tighter lending conditions coincide with concerns about the economic outlook, although the ECB said changes in the composition of respondents should be considered when interpreting the latest expectations data.

The Cyprus Securities and Exchange Commission (CySEC) has urged financial firms and investment managers to follow new European guidance on sustainability claims and prepare for standardised reporting of company ownership information, as part of efforts to improve transparency and consistency across financial markets.

In two circulars issued this week, the regulator highlighted European Securities and Markets Authority (ESMA) guidance on sustainability-related claims and a new European Union regulation setting common formats for reporting beneficial ownership information.

In the first circular, CySEC drew the attention of regulated entities to 2 new thematic notes published by ESMA on October 12, 2026, covering impact claims and transition claims linked to sustainability.

The guidance follows an earlier circular, C752, which informed regulated entities about ESMA’s second thematic note, focusing on environmental, social and governance (ESG) strategies.

The third note addresses impact claims, while the fourth covers transition claims, with both forming part of ESMA’s wider work on ensuring that sustainability-related statements are clear, fair and not misleading.

CySEC urged investment fund managers and Cyprus investment firms to keep up to date with the publication of these notes and said it expected them to take the guidance into account when meeting their existing ESG obligations.

The circular applies to Cyprus investment fund managers, including management companies and self-managed funds operating under the Undertakings for Collective Investment in Transferable Securities (UCITS) framework, as well as alternative investment fund managers, including smaller and sub-threshold managers, and Cyprus investment firms.

The second circular concerns a new EU regulation establishing common formats for submitting information about beneficial ownership, meaning the individuals who ultimately own or control companies and other legal entities.

CySEC said Commission Implementing Regulation (EU) 2026/2354, dated October 16, 2026, was published in the Official Journal of the European Union on October 22.

The regulation aims to improve the quality, consistency and compatibility of ownership information held in central registers across the EU by standardising how the information is submitted.

The common formats are intended to make beneficial ownership records more consistent and easier to use across national registers, supporting the exchange and comparison of information between member states.

The regulation will apply from July 10, 2027, and will be binding in its entirety and directly applicable in all EU member states.

CySEC encouraged regulated entities to take the regulation’s provisions into consideration ahead of its application, referring them to the published legal text for further details.

The second circular applies to a broad range of regulated organisations, including crypto-asset service providers, Cyprus investment firms, administrative service providers, UCITS management companies, self-managed UCITS, alternative investment fund managers and self-managed alternative investment funds.

It also covers self-managed alternative investment funds with a limited number of persons, companies established solely to manage such funds, and small alternative investment fund managers.

Together, the 2 circulars highlight the regulator’s expectation that financial-sector firms keep abreast of evolving EU requirements on sustainability communications and ownership transparency.

Deposits in Cyprus increased by €697.1 million in September 2026, while total loans rose by €857.80 million, with the Central Bank of Cyprus (CBC) reporting stronger monthly increases in both categories and an acceleration in annual loan growth.

The outstanding amount of total deposits reached €60.2 billion at the end of September, while total loans stood at €29.6 billion, according to the CBC’s latest monetary and financial statistics, released on Tuesday.

The net increase in deposits was substantially higher than the €171.50m recorded in August, although the annual growth rate remained unchanged at 6.5 per cent.

Deposits held by Cyprus residents rose by €639.9m during September, with households and non-financial corporations accounting for much of the increase.

Household deposits increased by €93.8m, while deposits held by non-financial corporations rose by €373m.

Deposits held by other domestic sectors increased by a further €173.1m, bringing the total increase in deposits held by Cyprus residents to €639.9m.

Meanwhile, total loans recorded a net increase of €857.8m, compared with an increase of €114.6m in August.

The annual growth rate of total loans accelerated to 14 per cent in September, up from 11.8 per cent in the previous month.

Loans to Cyprus residents increased by €470.8m, with lending to households rising by €52.2m and loans to non-financial corporations increasing by €110.1m.

Loans to other domestic sectors recorded a larger increase of €308.5m.

The figures were included in the October 2026 edition of the CBC’s Monetary and Financial Statistics, covering deposits and loans held by monetary financial institutions during September.