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Mixed opinions having permeated the market regarding the why, when, and how of a potential capital increase by the Bank of Cyprus (BoC), the bank’s Board of Directors is meeting today in a crucial setting hoped to positively resolve the issue.

As fears intensify that further delays in generating the extra capital needed may simply endanger the survival of the bank, it is expected that the Board will today approve a €1 billion recapitalisation drive.

These measures complement the single bank supervision system, already in place, and take the EU far down the road towards banking union.

Both Central Bank of Cyprus Governor, Chrystalla Georghadji, and President of the European Central Bank, Mario Draghi have expressed their vehement resolve that facilitating a capital injection in a timely manner is necessary, as the impending stress tests – that will assess the health and liquidity of the EU’s major banks under times of duress– loom.

Indeed, Georghadji famously sent a letter to the BoC, asking that the recapitalisation process be completed no later than August 8, engendering a wave of both praise and criticism.

It is understood that Draghi concurs with the short time-frame, equating ongoing uncertainty with the further loss of trust and confidence in the island’s largest lender.

President of the Cyprus Investment Promotion Agency, Christodoulos Angastiniotis, expressed the same sentiment at the ‘Breakfast with the Minister’ meeting that took place yesterday morning, explaining that Cyprus must be mindful of how such incongruities are projected abroad, and that stakeholders mustn’t underestimate the degree of damage induced.

Voices of the opposition, meanwhile, fear that an ultimatum forcing the completion of the process may simply aggravate an already exacerbated situation. DIKO’s Nicholas Papadopoulos queried: “Why this hurry to wrap up the recapitalisation process by early August and not September? Actions of this kind will only lead BoC into a prolonged crisis.”

InCyprus reports that the recapitaliaisation strategy has been hampered by a power struggle at the BoC between the foreign and local business figures, as questions of the degree of control each should attain within the bank’s structure have come under the lens.

Of this, EDEK’s Nicos Nicolaides explained: “It is obvious that existing shareholders should have the right to participate in the capital issue, bearing in mind that it is their deposits which were turned into shares back in March 2013.

“On the other hand, we also understand the efforts to bring in new investors, since this would be a vote of confidence for our banking system.”

BoC Chairman Christis Hassapis has stated that he is confident of a positive outcome come the culmination of today’s meeting.