Meanwhile, Cash Exodus From Cyprus Surges Despite Bank Closures, Capital Controls

Tyler Durden's picture

When Cyprus put its banks into lockdown last weekend until... well indefinitely, now that capital controls are established, the main reason was to halt all capital outflows from the henceforth liquidity starved island whose banks will only exist as long as the ECB provides an ever greater dose of liquidity to account for the collapse in deposit funding. Which is why it is surprising, make that shocking, that as Germany FAZ reports, in the past week there has been a surge in cash outflows from Cyprus, even as its financial system has been supposedly ringfenced from the world, which by the way is the only thing preventing the EUR17 billion bailout from soaring by orders of magnitude because should a liquidity leak be discovered, it is all over for the country's financial system. 

From FAZ, google translation edited:

Despite the closed banks and a lock for payments in the past week, more money flowed out of Cyprus than in previous weeks, Frankfurter experts report for payments. Prior to the escalation of the crisis in Cyprus accruing on the payment system Target liabilities of Cypriot central bank to the European Central Bank (ECB) had increased daily at approximately 100 to 200 million euros. In recent days was after Parliament the stabilization program initially had to fail, the daily has risen to more than double. Just in the last week so could cash assets have been withdrawn from Cyprus in the billions, although the Cypriot central bank has actually issued a lock.

...

Broad exemptions from capital controls

 

A few days ago, the Cypriot Fed made aware of the payments was interrupted. In the official announcement, which in these cases are quite common exceptions, however, are very broad. Allowed are transfers of humanitarian aid, those are not received financial stability is at risk, and "special payments", which are not defined in detail. The unusually high outflows from Cyprus in recent days indicated but then, that the central bank in Nicosia control rather liberally interpret, some analysts suspected for payments.

How is it possible that cash is leaving the country even with a bank halt? It isn't, unless of course, the banks aren't really halted, and some outbound wire transfers, which are permitted, are more equal than other wire transfers which are stuck on the island. Of course, that would imply an "Europe Farm" type of arrangement, which in the bastion of fairness, equality and honesty which is Europe, would be absolutely impossible.

On the other hand, if indeed the drain of the Cypriot banking system has continued despite all the enacted halts during the past week, then it's game over for Cyprus, which will soon have only the ECB to thank for providing liquidity, an arrangement that may not be the best long-term outcome for a nation whose economy has basically been gutted in the span of one week.

It also means game over for the bailout as envisioned, as the EUR17 billion is history, and much more cash will have to be injected to cover for the stealth outflows.

Of course, in what is now a Pandora's Box experiment in kicking the box, nothing could possibly surprise us. After all, even in a worst case scenario, there are GETCO algos doing the bidding of the BIS and literally bidding up the EURUSD to such levels as allow everyone to ignore the absolute terminal disaster that has happened in Europe in the past week.

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flacon's picture

I really hope this brings down the global "financial" (system) pyramid scheme.

DJ Happy Ending's picture

The lack of a bank run in any of the PIIGS proves what a bunch of ignorant sheep the Europeons are.

idea_hamster's picture

"How is it possible that cash is leaving the country even with a bank halt?"

I don't know -- how did Bin Laden's relatives fly out of the US while there was an order grounding all air traffic?

Cognitive Dissonance's picture

Just guessing here......but maybe they used their handy dandy Get-Out-Of-Jail-Free "Monopoly" Card?

<Or maybe nothing is or was as it seemed regarding 9/11.>

AlaricBalth's picture

Well, I guess that answers one of the questions I was pondering yesterday.
I'm wiling to bet that the European and US funds with cash in Cyprus banks are more equal than others.

"...There are many European, Ukrainian, Russian, Jordanian and American funds and investment trusts that have exposure to the Cypriot crisis. Billions have been invested in these funds. Will they be subject to capital controls as well? Will they experience any impairment? In order to do business in country, a Cyprus domiciled bank must be used as custodian and/or pay agent."

http://www.zerohedge.com/news/2013-03-22/cyprus-officially-passes-capita...

NoDebt's picture

I could cover a lot of ground under the "humanitarian aid" banner.  And "special payments?"  Wow.  How about I ESPECIALLY want to get my money out of your thieving hands?

blindman's picture

what is the latest on the jp morgue international front
office in Cyprus?

Buck Johnson's picture

People are getting screwed big time and they haven't seen it yet.

Mesquite's picture

Insiders R Us...(As usual...)

Urban Redneck's picture

These aren't even Russian Oligarchs using the Teng Bunma bank withdrawal method- it is bankers and politicians using SWIFT (in addition to routinely pointing guns at airline staff, Teng is also known to point them at bank managers when he wants to make a withdrawal after-hours or during a bank holiday).

http://en.wikipedia.org/wiki/Teng_Bunma

stocktivity's picture

It's the politicians and fat bankers that are able to move their money out

fockewulf190's picture

...and all their friends. No wonder Putin doesn't give a shit...I'll bet most of the Russian money is already gone.

nmewn's picture

Whaaa?

They don't really believe in fraternity, liberteee...a "we're all in this together" attitude of comrahhhddduuuurrreee? That all those archaic sayings are meant for the chumps?...lol.

This line cut to the chase...

"How is it possible that cash is leaving the country even with a bank halt?

It isn't, unless of course, the banks aren't really halted, and some outbound wire transfers, which are permitted, are more equal than other wire transfers which are stuck on the island. Of course, that would imply an "Europe Farm" type of arrangement, which in the bastion of fairness, equality and honesty which is Europe, would be absolutely impossible."

Trust is an earned thing. It can't be forced on people...coerced.

I've always been intrigued by the notion that if they shut off access to my bank account, what assets of THEIRS can I strip from them that are just laying around unattended?

Maybe that Mercedes sitting over there would be a good start ;-)

Race Car Driver's picture

> Maybe that Mercedes sitting over there would be a good start ;-)

Perhaps. But the car - like the assets in your bank account - isn't yours to do that with. You don't own Fed notes - Fed notes own you. Same with your house, car ... etc. You and me - we own nothing. We can use shit thru title and licensing - but we don't really ever own it.

And that's why you can't have the assets in your bank account when they close the bank - the shit ain't yours. You merely store it there and use it when needed... but a chosen few ultimately control how and when you use it.

jldpc's picture

We should have known then - damn that was a very visible indication of absolute corruption at the highest level - the seals got the wrong guy - it should have been Bush who lied to us over and over again - that the fucking politicians will steal every dime we have - one way or another in their criminal connection with the banbksters - money. Remember in the USA no one who commits a financial crime connected to a politician gets prosecuted.

CheapBastard's picture

No Muppet transfers allowed.

DosZap's picture

I don't know -- how did Bin Laden's relatives fly out of the US while there was an order grounding all air traffic?

Better yet, how Saudi's responsible for the 9-11 flights, anre now allowed a PASS on Passport cks by J Reno's sister.

El Tuco's picture

On Airfarce One.......mamosa's anyone...

toys for tits's picture

We won't know if there's been bank runs until we get the deposit information.

But the announcements that we've been having makes me think that others in the sector are seeing runs.

andrewp111's picture

Maybe not runs, but at least little jogs or slow leaks.

Jake88's picture

And what of the ignorant Americans who are so deluded that they think it won't happen here.

thisandthat's picture

You mean unlike Americans back in 2008?

HelluvaEngineer's picture

Germany FAZ?  How ironic.

Banksters's picture

Imagine going to jail for moving your money to a safer place as Banksters get immunity from prosecution.

Madness.

disabledvet's picture

imagine all savers having their money turned into "equity" in a bank that is now worthless "save for the big money" which is now gone. you could argue we have "progressed" in the sense that it used to be the Banks just closed for good and that was that. "now you get an equity stake worth ten percent of what you thought you had in there." doesn't sound like much progress though.

carlsbro's picture

Relax losers. Deal tonight and DOW 16,000 tomorrow

Radical Marijuana's picture

If so, flacon, do you also hope to see genocidal wars, along with democidal martial law? Those could well be the real consequences of the global pyramid scheme collapsing. I really hope that continues to be as postponed and protracted as possible, although I think it is inevitable. This Cyprus story unfolding appears to be an example of the OEDIPAL DILEMMA of self-fulfilling prophecy!

http://en.wikipedia.org/wiki/Self-fulfilling_prophecy

 

DosZap's picture

I KNOW, we KNOW whose cash is getting out.........and for what nations account holders.

Score ONE again for the Ever crooked Banksta Gangstas.

DoChenRollingBearing's picture

$500 came OUT of the ATM today, and it ain't going into stocks.  Even if Barron's is bullish...  CA$H and gold works for me.

"Review of Barron's -- Dated 25 March 2013"

http://tinyurl.com/a4ehphx

billhilly's picture

Excellent DCRB.  I wish I could withdraw 500 dollars but I don't have ANY cash in a banking entity. 

Time to ZERO OUT those accounts folks.  Do it yourself or they'll do it for you.

DoChenRollingBearing's picture

+++++

Yo, get to the point where money IN THE BANK is diversification!

NoDebt's picture

I took out $500 from the ATM today and I'm heading to Canada.  No joke.

Ok, Ok, it's just Niagara Falls with the family for vacation, but it does sound sinister, doesn't it?

DoChenRollingBearing's picture

Uncle Janet has a place for you!

Hmm...  FEMA Camp No. 131, near Rochester...

ebear's picture

Niagra Falls!!!  Slowly I turned...

NoWayJose's picture

Some MOAR equal than others is the European Way! I said there would be a whole bunch of back dated transfers timestamped right before the bank closures.

jeebus's picture

Some good basketball games on tonight on CBS.

THX 1178's picture

BAAAAAAAAAA! BASKET-BAAAAAAAAAAAAA

Hondo's picture

Germans getting paid??;

Abraxas's picture

Interesting point, but not likely. What they (EU, the Germans, banksters, etc) want is collateral, not just worthless paper. Collateral may include islands, utilities, public property and Cyprus posterity.

Legolas's picture

Does this news somehow endanger the bailout?   How so?

Conflict of Interest's picture

They must have put the money in Al Gore's lockbox.

Sabibaby's picture

A leak like some people are able to get their money out but not others? Kinda like a "who ya know" type of deal?

I wonder if any US Senators or CONgressmen have money in Cyprus? I'm thinking the Russian's have first access to the leak though.

BurningFuld's picture

OR it could be a "Who you threaten to kill deal."

disabledvet's picture

tough call if you're a banker. do i "follow the money" or "try and save the thing...and my town with it." http://www.youtube.com/watch?v=_Er69b4HMl8
http://www.youtube.com/watch?v=TAE8i40A5uI&NR=1&feature=endscreen

Sabibaby's picture

Is there anyway to trace where the money is going to?

pine_marten's picture

Not when it's been "vaporized".........

blindman's picture

z,
you guys an' gals are great reporters!
thanks.