Have The Russians Already Quietly Withdrawn All Their Cash From Cyprus?

Tyler Durden's picture




 

Yesterday, we first reported on something very disturbing (at least to Cyprus' citizens): despite the closed banks (which will mostly reopen tomorrow, while the two biggest soon to be liquidated banks Laiki and BoC will be shuttered until Thursday) and the capital controls, the local financial system has been leaking cash. Lots and lots of cash.

Alas, we did not have much granularity or details on who or where these illegal transfers were conducted with. Today, courtesy of a follow up by Reuters, we do.

The result, at least for Europe, is quite scary because let's recall that the primary political purpose of destroying the Cyprus financial system was simply to punish and humiliate Russian billionaire oligarchs who held tens of billions in "unsecured" deposits with the island nation's two biggest banks.

As it turns out, these same oligrachs may have used the one week hiatus period of total chaos in the banking system to transfer the bulk of the cash they had deposited with one of the two main Cypriot banks, in the process making the whole punitive point of collapsing the Cyprus financial system entirely moot.

From Reuters:

While ordinary Cypriots queued at ATM machines to withdraw a few hundred euros as credit card transactions stopped, other depositors used an array of techniques to access their money.

 

No one knows exactly how much money has left Cyprus' banks, or where it has gone. The two banks at the centre of the crisis - Cyprus Popular Bank, also known as Laiki, and Bank of Cyprus - have units in London which remained open throughout the week and placed no limits on withdrawals. Bank of Cyprus also owns 80 percent of Russia's Uniastrum Bank, which put no restrictions on withdrawals in Russia. Russians were among Cypriot banks' largest depositors.

So while one could not withdraw from Bank of Cyprus or Laiki, one could withdraw without limitations from subsidiary and OpCo banks, and other affiliates?

Just brilliant.

And if there was any doubt that the entire process of destroying one entire nation was simply to punish Cyprus, it can be completely cleared away now:

ECB officials contacted Latvia, another EU country that has received large Russian deposits, to warn authorities against taking in Russian money fleeing Cyprus, two sources familiar with the contacts said.

 

"It was made clear to our Latvian friends that if they want to join the euro, they should not provide a haven for Russian money exiting Cyprus," a euro zone central banker said.

If one thinks there is any material Russian cash therefore left in Cyprus with this epic loophole in place, we urge them to make a deposit in the insolvent nation. One person who certainly will not be allocating any of his money into Bank of Cyprus is German FinMin Schaeuble:

German Finance Minister Wolfgang Schaeuble said the bank closure had limited capital flight but that the ECB was looking closely at the issue. He declined to provide figures.

Perhaps because if he did, it would become clear that the only entities truly punished by this weekend's actions are not evil Russian billionaires, but small and medium domestic companies, and other moderately wealthy individuals, hardly any of them from the former "Evil Empire."

Companies that had to meet margin calls to avoid defaulting on deals were granted funds. Transfers for trade in humanitarian products, medicines and jet fuel were allowed.

The stealth withdrawals by Russians of course means that the two megabanks are now utterly drained of capital, and that the haircuts on those who still have unsecured deposits with the two banks will be so big it will likely mean a complete wipeout of all deposits. As in 0% recovery on your deposits!

In other words, by now any big Russian funds in Cyprus are long gone, and the only damage accrues to the locals: for one reason because their money over the critical EUR100K threshold has been "vaporized", and for another because the marginal driving force and loan demand creator in Cyprus, the Russians, are gone and are never coming back again.

This is what passes for monetary real-politik in the New Normal - an entire nation becomes collateral when pursuing a wealthy group of people. And the "wealthy group" is victorious in the end despite everything...

If we were Cypriots at this point we would be angry. Very, very angry.

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Tue, 03/26/2013 - 01:16 | 3375676 delacroix
delacroix's picture

the cooling systems, are designed for cold weather. they have problems in hot climates

Tue, 03/26/2013 - 06:12 | 3375915 css1971
Mon, 03/25/2013 - 18:59 | 3374562 mendigo
mendigo's picture

So failure to make an interest payment would clearly constitute an act of default.
But grab money from your clients account.......no problem!
No why did I not think of that.
So by this standard Jon Corzine is definitely off the hook.
I think most drug dealers would find this somewhat underhanded...and possibly did. There's a new sheriff in town.

Mon, 03/25/2013 - 19:08 | 3374597 mendigo
mendigo's picture

No longer to be described as the "E"-"U" , but rather the EEWH... because that shit stinks.

Mon, 03/25/2013 - 18:59 | 3374564 Xrated
Xrated's picture

Russian mafia reminded the bank officials of

Boris Berezovsky's fate
Mon, 03/25/2013 - 19:00 | 3374569 ozzz169
ozzz169's picture

Is this real?  if so, the country is completely screwed.  amazing...

Mon, 03/25/2013 - 19:04 | 3374582 Pampalona
Pampalona's picture

New Cyrpiot tourism ads: 'Come take a relaxing break in sunny Cyprus, where EVERY day is a bank Holiday!!!'

Mon, 03/25/2013 - 19:29 | 3374663 toys for tits
toys for tits's picture

lol +1

"Despite having the largest number of banks in the wild, per capita, we will take you on a special tour so that you may see that rare sight, an open bank." 

Mon, 03/25/2013 - 19:09 | 3374601 Meremortal
Meremortal's picture

I submit that this will not happen in America. This wouldn't have happened in Cyprus if Cyprus could print money like the US.

The EU structure is the problem here.

America has no need to dun accounts, the FED has been stealing cash by lowering its' value since the FED's inception and has recently accelerated that process. And it doesn't matter where you keep it.

Quiet, clean and easy. Even now, only a minority know what's going on.

 

Mon, 03/25/2013 - 19:09 | 3374604 lindaamick
lindaamick's picture

1) Russia was quiet and did not offer the money because they knew they would be able to repatriate millions/billions in depositor monies before the bank take downs, ie, Russian banks benefit.

2) Russia also knows that the people of Cyprus and the government will become increasingly desperate due to small busiesses being robbed by the EU and the people becoming increasingly impoverished they might agree to sell off their gas futures to the highest bidder for crumbs out of desperation.  

Also, the geopolitical ramifications of this bank thing has not been revealed yet but there are many "Interested" parties.  Nato wants to include Cyprus, the EU countries plus Britain and Turkey want a gas pipeline to ease their reliance on Russian gas and Russia wants a leg in the Med via a non-Nato Cyprus and the gas rights.

It will be interesting for those of us who stay with the story (the interesting things will happen AFTER the media is gone) and interesting due to us NOT being a poor Cypriot citizen who will be screwed in many many ways.

Mon, 03/25/2013 - 19:15 | 3374617 Likstane
Likstane's picture

You can withdraw, transfer, co-locate, re-hypothecate, unfund, refund, electronic wire, and substitute any and all the fiat in any account you want with any bond, bitcoin, certificate, etf, paper piece of shit money substitute you want.  Eventually there is no place to safe keep your wealth except the shiny hard coin in your left fist with the bullet spewing steel piece in your right(switch them if you're a lefty).  Any one still keeping the bulk of their value storage in non-metallic entities deserves to lose it. 

 

Mon, 03/25/2013 - 19:15 | 3374621 Kreditanstalt
Kreditanstalt's picture

Nobody's money should ever be "seized", "taxed","confiscated" or just plain stolen.

Three cheers for the Russians for ingenuity!!

Mon, 03/25/2013 - 21:31 | 3375131 sethstorm
sethstorm's picture

Applauding tax evasion is applauding crime in itself.

Trying to screw over the government only makes your fate that much worse.

Tue, 03/26/2013 - 01:40 | 3375709 akak
akak's picture

I wonder, were you born on your knees, or is it a learned behavior?

Tue, 03/26/2013 - 17:08 | 3378939 sethstorm
sethstorm's picture

I wonder how many beehives you knocked around until you got the idea not to do that.  Mess with the governments enough by tax evasion and things will not look well for you.

But if you insist on being Icarus, go ahead.  Just don't complain that your wings melted off during the fall.

Mon, 03/25/2013 - 19:18 | 3374629 rsnoble
rsnoble's picture

Fkn crazy.  This world just gets more nuts by the day.  If not by the minute.

Mon, 03/25/2013 - 19:21 | 3374633 are we there yet
are we there yet's picture

I remember thinking over a week ago when Cyprus banks were going south that Russia was being strangely quiet and low key, and also thinking that this does not add up.  Russian oligarchs are not pasive compliant personalities. Now we know they did not want to attract attention while they were lowering their lifeboat.

Mon, 03/25/2013 - 19:21 | 3374637 Mordenkainen
Mordenkainen's picture

Boris Berezovsky died by hanging, police say

http://www.bbc.co.uk/news/uk-21934079

Hanged himself with piano wire?

Mon, 03/25/2013 - 19:32 | 3374676 toys for tits
toys for tits's picture

Then he cut himself down and threw the wire away.

Tue, 03/26/2013 - 00:40 | 3375648 seataka
seataka's picture

sounds a bit like the death of the nation’s first Secretary of Defense, James Forrestal

Tue, 03/26/2013 - 06:16 | 3375917 francis_sawyer
Mon, 03/25/2013 - 19:58 | 3374796 Debugas
Debugas's picture

nope, he did it with with a scarf even without hanging - simply tied it to hard

Mon, 03/25/2013 - 21:05 | 3375055 Tunga
Tunga's picture

... after he shot himself in the head... twice.

Mon, 03/25/2013 - 19:22 | 3374638 One of We
One of We's picture

http://masterrussian.com/graphics/signs/s0013.jpg

English:  Entrance from the backyard

Mon, 03/25/2013 - 19:24 | 3374647 yrbmegr
yrbmegr's picture

Duh!

Mon, 03/25/2013 - 19:27 | 3374657 ekm
ekm's picture

Ok, people. Again, Military is first, finance is second.

Finance simply complements military.

If you remember, the 1st hit would have been 10% of deposits, which is insignificant for the oligarchs. So, it was not about money. Strange enough, russians are too quiet.

 

Check here and check the date of the article March 13, 2013, only few days ago.

http://www.cyprus-mail.com/alexander-downer/us-welcomes-stronger-ties-na...

 

USA and NATO always wanted Cyprus, always. It was the previous president, a communist who brought the russians in.

However, the new president wanted NATO in. Remember, Russia a global force and does deals.

 

 

Here's the deal that may have been stricken, my conjecture:

- Russia gives cyprus to Nato

- Russian oligarchs save their money

- Nato agrees that Russia keeps Syria base in order to fuel and maintain the fleet.

- Russia has agreed not to care about syrian president Assad any longer.

- During the nato membership process, UK hands over 2 military bases to nato, greek and turkish parts of cyprus re-unite under Nato. Remember, Turkey is nato member, also.

- USA and Europe pour money into Cyprus by investing in expanding brittish/nato military bases.

 

It seems a good deal to me.

 

Mon, 03/25/2013 - 19:31 | 3374671 ekm
ekm's picture

In the meantime, Merkel wanted a piece of the cake in order to help her re-election.

 

The crucial factor to me as far as finance only is the follows:

As part of the above mentioned possible deal,  with the only real goal being to secure a military base on the mediterranean, have the russians accepted to be defaulted on the CDS payouts, which the QEs are done for?

 

If the answer is yes, then QEs will be slowed down very soon, quite soon.

 

And of course, I'd like to emphasize again, that Draghi was simply a shadow in all this matter. By extension, since military is first and finance simply assists the military goals, Bernanke is always oh hold ready to receive orders.

Mon, 03/25/2013 - 19:41 | 3374716 yrbmegr
yrbmegr's picture

The reunification part is oversimplified.  Turkey and Greece will never agree to a publicly reunified Cypus.  There may be de facto reunification, but each country will retain its de jure sovereignty.

Mon, 03/25/2013 - 19:43 | 3374727 ekm
ekm's picture

That would mean mutual recognition.

Possible.

Mon, 03/25/2013 - 22:54 | 3375459 ATG
ATG's picture

Only one major issue:

USA on the verge of losing military superiority despite first strike capacity in 2015:

http://www.globalresearch.ca/u-s-building-global-first-strike-capacity-a...

http://wiki.answers.com/Q/Which_country_has_the_best_military

 

 

 

Tue, 03/26/2013 - 01:37 | 3375704 lakecity55
lakecity55's picture

Yes, Cyprus would make a nice, humongous NATO base for superiority in the Med.

A military takeover ny NATO cannot be far behind.

GAZPROM gets a cut of the energy resources.

Germany re-conquers Cyprus.

Mon, 03/25/2013 - 19:28 | 3374660 pashley1411
pashley1411's picture

And so we see that the reason Putin isn't gettting real fired up over this is that, well, when your enemy is making a mistake....

Mon, 03/25/2013 - 19:28 | 3374661 Jethro
Jethro's picture

The ECB trotted out Cyprus as their Gimp. Russia just got mideaval on the ECB's ass....

Mon, 03/25/2013 - 19:31 | 3374666 Pampalona
Pampalona's picture

What if u have an account in each of those two banks ... Each with 99,000 euros?

Mon, 03/25/2013 - 20:07 | 3374831 Legolas
Legolas's picture

Even if you have an account in each of those two banks ... Each with 9 euros, you're SCREWED !

Mon, 03/25/2013 - 19:31 | 3374668 nothing can go wrogn
nothing can go wrogn's picture

It's one thing to say that the smaller deposits are "insured." It's another thing to actually be one of those depositers and get your money back (if the Cyprus banks ever reopen).

They just threw that in there to not spook the rest of Europe. Those small depositers have a giant IMF dildo up there...right now.

Holy shit...it's like a neutron bomb, they blew up Cyprus and all the buildings are still standing.

Mon, 03/25/2013 - 19:35 | 3374687 Benjamin Glutton
Benjamin Glutton's picture

Bank Holidaze are for the little people....

Mon, 03/25/2013 - 19:43 | 3374729 Dr. Kananga
Dr. Kananga's picture

I knew it!

The new Russians do not wait in lines, Comrade...

Mon, 03/25/2013 - 21:00 | 3375032 newengland
newengland's picture

You will.

Mon, 03/25/2013 - 19:51 | 3374742 ATG
ATG's picture

Great reportage TD/ZH.

The next surprise EU casualty may be France, who just closed below 50 day moving average:

http://stockcharts.com/freecharts/gallery.html?%24CAC

Vive la France...

Mon, 03/25/2013 - 20:06 | 3374816 newengland
newengland's picture

Vichy France deserves the worst. Do remember that its sadistic rapist beloved DSK of its Socialist Party was leading presidential contender whilst head of the nazionist IMF...before his penchant for sexual sadism was exposed, no doubt by one of his own, a rival, a fellow nazionist Sarkozy?

Long live the French people. Long drops and short ropes for its traitorous political class.

Mon, 03/25/2013 - 19:47 | 3374750 newengland
newengland's picture

They can run, but there will be no escape for the oligarchs who double crossed Mother Russia and their last vassal state, as does the EUSSR, its gangster banksters and traitor political class.

Interesting that Abramavich and his world's biggest yacht moored off New York in February this year, hiding in plain sight, seeking refuge among his fellow Nazionists who will as much double cross him as they did Robert Maxwell when he outlives his purpose. Typical Madoff and Corzine behavior among the cut throat tribe, the rootless cosmopolitans who value money and power above any human being, culture or common decency.

Putin is a patriot. Any honest patriot can do honest business with someone like him. Only a patriot knows what it is like to love the land and people of one's birth so very much that every breath, every danger, every fault, every terrible act will be committed in defence of kith and kin.

The West misunderstands the Medvedev's comment: '...the stealing of the stolen continues...'. They do not understand Russian realism: that they were conned by international financiers, old and new.

After the 1917 revolution, Lenin the pet of zionist German banksters mused: “The old Bolshevik was right when he explained what Bolshevism was to the Cossack who’d asked him if it was true the Bolsheviks stole. Yes, said the Bolshevik:  "We steal what has already been stolen.’


 The current problem is led by Germany, and Lenin was a German intelligence asset given the job of causing revolution in Russia to take Russia out of the war - thus freeing up Germany from a two-front war.

Crypto-communist Merkel, like Marx and others funded by the international banking cartel want to kill capitalism. They want monopoly, total control, a jackboot on the face of mankind, as Orwell fortold in his prescient novel '1984".

The modern cinematic version might be 'V' for vendetta, and the masked hero says: 'If you feel as I feel...' while he urges the people to burn down Parliament, and break the chains of their stupor and collaboration with the venal modern political class in London.

It always comes back to London, the conniving City, the duplicitous Nazi royals and their  continental bloodline who slaughtered Czar Nicholas and his family and unleashed the Red Terror, slaughtering Christians and Russians.


 

Mon, 03/25/2013 - 21:17 | 3375088 andrewp111
andrewp111's picture

Ah yes, the City. I'd love to see the City of London fail. That would be an event worth popping whole bushels of popcorn for.

Mon, 03/25/2013 - 21:45 | 3375167 newengland
newengland's picture

Guy Fawkes was the last honest man to enter Parliament, and even he was dubious, being a papist, a Vatican tool of the old oligarchy.

End the Fed.

End the Vatican.

End world slavery.

Guillotine the conniving lying two faced Nazi loving monarchy.

Mon, 03/25/2013 - 22:11 | 3375295 TNTARG
TNTARG's picture

Interesting.

Mon, 03/25/2013 - 19:48 | 3374752 Crash Overide
Crash Overide's picture

Nothing will change until the masses starts stringing up bankers, politicians, and any other greedy fucks on light poles. I do no advocate violence but sometimes it has to be done this way to "send a message" from the people...

Mon, 03/25/2013 - 20:46 | 3374980 W74
W74's picture

I advocate exactly what you speak.  I usually prefer strong-limbed oak trees, but in the absence of those light poles will do.

Mon, 03/25/2013 - 22:57 | 3375481 honestann
honestann's picture

Do you consider "self-defense" to be "violence"?

Mon, 03/25/2013 - 19:50 | 3374764 One of We
One of We's picture

Ain't got no place to lay your head 

Somebody came and stole your bread 

Don't worry, be happy 

The ECB say your alms is late 

He may have to liquidate 

Don't worry, be happy 

Look at me I am happy 

Don't worry, be happy 

Ain't got no cash, ain't got no style 

Ain't got no bitcoins to make you smile 

But don't worry be happy 

Cause when you worry 

Your face will frown 

And that will bring EURUSD down 

So don't worry, be happy (now)..... 

Take this little bankster note 

No questions or we get the garrote

Like good little sheep 

Don't worry, be happy

Listen to what I say 

In your account expect some trouble 

Pro'ly cuz of Merkel and Schauble

But don't worry, be happy...... 

Mon, 03/25/2013 - 19:55 | 3374766 epwpixieq-1
epwpixieq-1's picture

The elite banking families (the old oligarchs), wanted to show to the new oligarchs who is the boss, but apparently the new oligarchs know how to use the system better then the old oligarchs.

The old oligarchs (banking families) used play against the system in this way, back in 19the and in the beginning of the 20th centuries, but in the recent decades they just got more greedy and lazy and decided that is a better gain for them just to create the "laws" of the land, favoring their business, and to go with the "law" enforcement ( the government) against everyone else how tries to be smarter then then.

It seems that in this case it did not work out. 1:0 for the new oligarchs, in this battle ground.

What will be the next, who knows, but ones is clear we are entering very interesting and somehow trigger happy times.

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