Will Russia Kill The Cyprus Bailout?

Tyler Durden's picture

While hope appears to still be alive that the Cypriot government will hand over their natural resources to wealthy Russia (or Gazpromia) and all depositors (Russians and Cypriots alike will be saved), we suspect there is a much bigger threat from Russia that has not been discussed. As Monument Securities' Marc Ostwald notes "there's a 50/50 chance Cypriot bailout fails because of the 'massive danger' a large amount of Russian cash flees Cyprus following deposit tax plans." Russia has ~$60 billion exposure to Cyprus, including loans to companies registered in the country and after the haircut 90% of Russian deposits will still be free to leave the country if the levy is approved.

The critical point is that, should this occur (such a large outflow of Russian cash - dwarfing in fact the size of the bailout package itself) it is hard to see how the Cypriot banking system could survive (even with the assistance of the ECB's ELA). Russia's Finance Minister Siluanov expressed disappointment that Russia was not involved in the deal and it is clear that should those outflows leave Cyprus, they are unlikely to end up in other European nation banks.

It seems the pre-emptive contagion and anxiety of this 'levy' have only just begun.

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Chuck Bone's picture

"...and it is clear that should those outflows leave Cyprus, they are unlikely to end up in other European nation banks."

There's always Switzerland.

maxmad's picture

who would have thunk WW3 would start over Cyprus?  oh well.....

Thomas's picture

Yeah. It's not like somebody shot an arch duke or something.

SWRichmond's picture

Imagine the fun if the Russian depositors took their Cyprus cash and bought gold...

Careless Whisper's picture

UFC 159: IMF Mafia Welterwieght Chrissy Diaz-Lagarde v. Russian Mafia Welterwieght Vlad St-Putin


inevitablecollapse's picture

i'd put my hard earned fiat on putin (not that it's worth much anyways) - i mean for crissakes the guy wrestles bears for fun!

Chupacabra-322's picture

that doesn't change the fact of the Russian Mafia doesn't like being stolen from much less following any NWO Banksters for that matter.

I might add on the Western Front the Global Criminal Cabal (Intelligence/Bankster) Crime Syndicate are about to John Corzine the whole world. Cornzine was just the warm up just to see how much the Criminals could get away with.   

Could this be the future as to why FBI and other alphabet agencies want access to every ones bank account here in Amerika?

A case, forget which one has already been ruled in US Courts about raiding Customer's Segregated Accounts under the guise of wide spread durress.

Texas Ginslinger's picture

With the IMF & EU powers forcing the Cyprus tax haven bank account holders (mostly Russian money) to pay the bill  today, it will be interesting to see how the Russian natural gas suppliers squeeze the EU in retaliation.

The EU may have just made a huge mistake.

You don't bite the hand that feeds you gas...

HoofHearted's picture

Unintended consequences, bitchez.

"Nobody could have seen this coming....nobody..."

rqb1's picture

They know exactly what they are doing.

freewolf7's picture

Cyprus has her black swan suit on, smiling back at us.

swissaustrian's picture

or the City of London, or Dubai, or Miami, or the Vatican.

The battle for market share in money laundering is on. Trustees and banksters are ready for the Russians all over the world.

francis_sawyer's picture

Wells Fargo needs to pad its resume...

insanelysane's picture

except Swiss bankers have started ratting out their depositors.  There is definitely opportunity out there in this market segment.  I am sure Goldman and JPM have something set up somewhere in the world.

BLOTTO's picture

Something special about the island of Cyprus that maybe we dont know about exactly?


Geographically, its a strategic location in the middle east.


Its been occupied by several major powers during its ancient history...Egyptians, Assyrians, Persians, Romans and Ottoman Empire...


LawsofPhysics's picture

Not quite; Cyprus is to Russia as the Bahamas are to the U.S.

Lost Word's picture

And Cyprus was occupied at one time by the Templars, the first major international banking org.

Telemakhos's picture

No, but Latvia is the new Cyprus.  JPM and Goldman have branches (where don't they?), but I doubt they'll see the bulk of the Russian money; it'll disappear untraceably into very opaque, very local institutions.

EclecticParrot's picture

I agree that a Swiss haven may be yesterday's strategy.  Instead, expect a lot of post-haircut funds to be directed to struggling NBA franchises, such as rescuing the Kings for CA and moving them to a new Stadium/Winery combo in the Russian River Valley.

swissaustrian's picture

Soccer clubs are great vehicles, too.

Portugese and Spanish clubs are used for South American drug money laundering.

German, English and Swiss clubs are the Russian and central Asian favorites.

The Russian league itself is the outflow mechanism. That's why their clubs are buying so many overpriced South American players.

Mountainview's picture

Do you really believe, Russian have their money in Cypriot savings accounts...I suppose They use Cyprus as an intermediary platform, where probabely informed on the issue before all the others...and have moved on to circumvent the EU measures..

MsCreant's picture


At least their dictator has some balls. 

bank guy in Brussels's picture

Indeed the best solution is suggested above

Cyprus dumps the euro, leaves the EU and aligns with Russia

What the EU itself should be doing if it had a brain ... Hello, Moscow, Good riddance to the USA and Nato

SeverinSlade's picture

Russian oligarchs no happy.

swissaustrian's picture

The Eurocrats don't want the dominoe effect of one country leaving. The Cyprian government should call their bluff.

Lost Word's picture

Russia and the West are two sides of the same NWO, only a contest to see which side becomes the leader of the NWO.

lotusblue's picture

Bank guy in Brussels,

              don't you think this case of,"the devil you know is better than the devil you don't" ? Granted,Soviet/communist era is way past but Putin surely will be tempted to use the 50-60 bil in Cyprus to bolster himself politically and as personel piggy-bank.

BurningFuld's picture

You are right about the Devil you know. Because you already know the USA is 100% corrupt. What if Russia was only 90% corrupt? You would have no idea what they would do next...what if they actually helped out their citizens?  You just can't have an unknown like that hanging over your head.

Panafrican Funktron Robot's picture

Tropico was a close second to Sid Meier's Pirates! for me, I guess ultimately I rather be the guy stealing from the rich than the other way around.

Ghordius's picture

"Cyprus dumps the euro, leaves the EU and aligns with Russia" - have you asked the Cypriots if they want this?

I get it, you do have a little problem with the American Empire, and yes, I can understand your frustration with the government of our American cousins of the (mostly) naive, innocent persuasion, but I, for my side, am not willing to forsake several generation of alliance for a very doubtful full embrace of the proto-fascist dictatorial approach of Mother Russia. I like Russia, I like Russians, but let's say I prefer to keep options open

the vicinity to Brussels seems to distort your views and attitudes, imho, both versus the western part as versus the eastern part of the alliance

Shylockracy's picture

Remember, Ghordius, geography and demography are destiny. Eurasia is the Heartland, as McKinder put it, and the only possible successor to the dying American order.

Btw, prey tell, who on earth is the "we" you have in mind when you refer approvingly to "the government of our American cousins"? I am still to meet any moral and decent American who underwrites his government with the nonchalance you do. But again, for an appologist of Little Brother (European Soviet Union), Big Brother (US Gov) cannot seem that foreign.

Ghordius's picture

do I underwrite governments (plural) that engage in treaties? perhaps. does this make me an apologist? only if I write something I don't believe

Panafrican Funktron Robot's picture

Given that one side of the fight (UK/US) doesn't appear to be any morally better than the other side (Russia/China), I would say, whoever is giving you the better deal, go with them.  

Non Passaran's picture

Have the eurocrats asked the Cypriots anything? They say they gave Cyprus an ultimatum, "the Greek style".

And speaking of proto-fascism, the EU fits the bill perfectly (and the US isn't too far behind).

wagthetails's picture

Is EU still wanting to make fuck?

Kirk2NCC1701's picture

Agreed. Yesterday I blogged that Cyprus accept a gold-backed Ruble, and the naval port, to safeguard their share of the huge gas reserves offshore, that Gazprom can help them develop. Now THAT would be a "Take A Long Walk Off A Short Cyprus Pier!", you EU and IMF scum!

GetZeeGold's picture



Looks like Vlad might take his ball and go home......can he do that?

ATM's picture

Nope. Vlad is stuck. When he goes to withdraw his money the teller will ask him to wait a moment while she gets the manager.

The manager will explain that there is a slight problem and he cannot take his cash today. Please comeback tomorrow.....

grunk's picture

And Vlad tells the manager that he will be back tomorrow with the manager's kids.

If he makes a 100% withdrawal, you get 100% of your children.



ATM's picture

The kids will be dead either way. 

Hughing's picture

I think you onto the problem. The deal is desinged to keep Russia from controlling Cyprus. How Europe doesn't have 20 billion sitting around or on a Fedex truck is baffling.  The Russians are for real, not the candy ass passive agressive sh#t from Brussels.

Lost Word's picture

The old Cold War could turn Hot.

More MAD threats.

More money theft for Military Industrial Banksters.

Mountainview's picture

Most  the Moscow money is with Cyprus subsidaries of USbanks...and they probabely advised how to handle the issue in advance..

Sheeple Shepard's picture

I doubt it, that would just be too much! They could, however, as a next best option "dispatch a permanent fleet of five or six combat ships to the Mediterranean Sea..."




pan's picture

I kind of like Putin right now.