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Russian Withdrawals Quantified As Cyprus Central Bank Set To Expand Emergency Credit By Up To €3 Billion
When we reported yesterday that over the past week, the Russian depositors in Cypriot banks had managed to find loopholes through which to pull out billions in supposedly halted deposits (courtesy of bank shutdowns and capital controls) some, accurately, balked: if that were the case the Cyprus Centeral Bank would need a proportionate increase in emergency funding from the ECB (in the form of ELA) to make up for the deposit outflows. Which is why moments ago Welt reported precisely what we had been expecting to read all morning: the Cyprus Central Bank is about to demand even more cash from the ECB to plug the holes left from the stealthy Russian outflows.
- CYPRUS CENTRAL BANK PLANS EXPANDING EMERGENCY CREDIT: WELT
- CYPRUS PLANS EXPANDING EMERGENCY CREDIT BY EU2.5B-EU3B: WELT
- DIE WELT CITES UNIDENTIFIED PERSONS FAMILIAR WITH THE MATTER
Remember: this is just a feeler by the Cyprus Central Bank in direction Frankfurt - the last thing Cyprus wants is to expose just how big the full liquidity hole is resulting from the stealthy Russian deposit outflows. We expect when all is said and done, the full incremental bailout needs to rise in the double digits.
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Fuck the PIIGS. Everybody south og the Alps and west of the Rhine is a criminal!
How right you are...and also those politicians north of the alps and east of the Rhine.
And that Berezhofsky guy must have been told that his funds transfer request didn't go through.
When you go up against a nation that can produce people that can play 50 games of chess simultaneously against 50 pretty smart well accompliahed people, and the Russian wins moat of the games, then you should not underestimate the strategic possibilities that a group of smart Russians with even smarter advisers, can plan and implement.
BULLISH!
When there is nobody left to blame - blame Russians! All those Russians should be held guilty for Europe's problems. They are smarter than everybody else. No Brit no other deposit holder was able to find loopholes, the Russians did.
There seems to be confusion over the 40% haircut. If you have 200k euros in one account a Cypriot bank, you have 100k covered by insurance and 100k subject to the haircut. So you lose 40k out of 200k, a 20% loss on your total account.
At one million euros in one account, you lose 40% of the 900k euros not covered by insurance.
If you have multiple accounts of no more than 100k euros, you lose nothing.
Remember when we used to compare the financial crisis to a game of musical chairs?
We're there. The music just stopped in Cyprus and there aren't enough chairs.
Smoke and mirrors. The euro banksters left the door open for the Russians so that their physical ass was protected and so the full cost can continue to be borne by the trusting/captured, ignorant/impotent, savers/taxpayers.
If we are all standing after this, a lot of great stories are going to come out of this. Books, movies, a whole lot of stories.
It's not likely much in the way of deposits escaped the two Cypriot banks, maybe some millions of euros but certainly not twenty billions.
Instead, the asset sides of the banks' balance sheets are collapsing both due to depositor withdrawals effecting reserves and loans falling worthless. It's clear -- when push comes to shove -- the ECB's Draghi WON'T do 'whatever it takes' and float more euros. In fact, he'll do the exact opposite: remove leverage and take euros out of circulation!
There really are no assets in the West, no real forms of collateral other than currency deposits and some used cars.
Steve, you haven't spent much time in farming, oil and gas, or mining and timber country lately if you believe what you said.
so this looks a lot different now
http://www.spiegel.de/international/europe/bild-890860-477020.html
maybe the 20.9 billion was all russian (probably more likely half to two thirds) out of the total cypriot banking deposits of 68.4 billion
Could some of the 42.8 billion be Russians depositing as Cypriots for haven reasons ?
could be..depends on data quality..i know a lot of russians living around, for example, Limassol that have "dual nationality" for tax reasons..
the russians (classified as "non-resident" or "cypriot" in the venn diagrams) in cyprus are not all solely motivated by tax, perhaps (guessing) 10-15% of them have retired, 50-60% are not actually resident and are recycling cash flows for tax purposes and the balance have either integrated into the local economy or are suporting the activities of the "dodgers".
according to that representation in the link..the biggest hit my well be taken by cypriots; a haircut on the 36.9 billion that is over 100,000 (40%?)
there is no breakdown on the domestic to foreign split of this c. 37 billion..my guess its 50:50..so cyprus is taking out its top 5%
i still don't know why assets of fund managers based in cyprus weren't being given a haircut, in the initial "oh my god, we lost the economy" proposal that has now, thankfully been shelved.
i also don't know why prosecution isn't a better route than confiscation; shooting the whole village because on of them may be a murderer seems to breach every tenet of law ever invented and is reminiscent of a reprisal mentality of an occupying military force.
I was trying to get a handle on whether the new graph (numbers) changes the dynamics a bit in terms the Cypriot people bearing more of the hit.
If the Russians were able to pull significant amounts away during the "lockdown" and further skews the confiscation torwards Cypriot's it would suggest to me that civil unrest might become more of a factor as it all playes out...
Call me Zerohedge (i.e., 'call me crazy'), but I'm starting to think the whole thing is an inside job...
1. Banks clearly going into the crapper. Russian depositors unhappy. Need to get money out. However, if they draw in broad daylight, not everyone gets out (if any.)
2. Cyprus and EU arrange for a loan to take place during an ever extending bank holiday that shuts out all depositors, except those who can get to the London branch, which --oops-- remains open (never mind the theatrics of the past two weeks surrounding the loan--just a cover.)
3. EU loan goes indirectly to covering Russian withdrawals--which no one officially knows of yet.
4. Banks finally open and go BOOM. Cypriots are on the hook for the loan, foreign depositors are long gone.
And why? Because Russia told Germany if you want to keep the gas on this winter, make it so, or else...
Crazy, I know. No one would ever dream of hatching such a thing.
We think the Cypriot bankers are fools, yet they managed to secure a bailout from the ECB, while at the same time protecting both their small investors and extra-large investors. When the ECB actually tries to confiscate the uninsured deposits, there will be much less to be found than originally thought. Both Cyprus banks will technically fail, but the ECB will still be obligated to ship Euros to Cyprus.
All credit to ZH! I read the story here yesterday and it was right on the money. Try getting this news on CNN or CNBC! Chirst! Yesterday morning I listened to a National Public Radio economic report in the moring. They interviewed a Cypriot citizen who said NOT to believe some of the scare stories in the media, He said that he gets up every morning and things are calm and normal all over Cyprus. Just hype, mostly Cyprus is functioning perfectly under the new bailout scheme.
I have said for years now that NPR is an arm of the US Federal Reserve when it comes to economic reporting. Whatever line the Fed is pushing, NPR will create stories to back it up. To listen to NPR talk, we have a booming housing market, jobs have been in big recovery for 2 years and student loans are well under control! Bull Shit! NPR is a lie machine. And don't get me going on their fluff upbeat reports from Afghanistan! The war is going great and the Afghans are going to school getting degrees and setting up businesses all the while being grateful for their liberation. Oh NPR? Then send your so called fucking reporter outside the wire and see how long they last. 5 minutes tops!
Sometimes is a bit annoying, but ZH doesnt really deserve the credit they were quoting/commenting on the Reuters peice, they deserve the credit, and the original author Annika Breidthardt, Luke Baker and Michele Kambas.
I love zero hedge but need to keep the sources straight and give these hard working people the credit they deserve :)
MORE THAN 30% of Cyprus deposits were Russian. of approx $68B that = $20B minimim. I know a LOT of Russians. good people for the most part, but crafty too. And I can guarantee if even ONE Russian managed to find that backdoor and get funds out while the banks were closed, EVERY LAST ONE of them did likewise. They talk and spread info faster than you can say motherrussia! They learned to do that from the Old Soviet.
So, if Cyrprus is now saying they need a few pesky $2.5B more in liquidity, we can rest assured they need at least $20B, and probably more, because I am positive some nice Russians told non Russian friends how to do likewise and withdraw money...if for nothing else a small fee :-)
850,000 Cyriots, $40B in non-russian deposits... = $47,000 for Every Man, Woman, Child living on that Island in domestic savings...REALLY??? I think not...HAHAHAHAHAHA OMG they are FUCKED!
where is my cognac bitchez...