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Cyprus Bank Deposits Plunge By Most Ever During "Capital Controls" Month

Tyler Durden's picture




 

Following the improvised and very confused bail-in of the Cypriot banking system in mid/late March, one of the key requirements was to contain the liquidity within territorial Cyprus, and prevent the outflows of critical bank funding liabilities - i.e., deposits - abroad thus causing a waterfall cascade of ever increasing capital needs and bigger and better bailouts. Thus capital controls, which two months after the bailout, are still in place. Judging by just released Cyprus Central Bank data they failed. Because even though the deposit outflow in March, when the fiasco happened, was a moderate €3.8 billion, which the European politicians promptly pointed to as confirmation of a job well done, it was the April outflow that was the jawdropping number.

In a month in which deposit flight should have been largely contained, Cyprus banks saw a record outflow of 6.4 billion, or 10% of its entire deposit base, in one month!

But the sad punchline is that while deposit flight by domestic residents was an unfortunate if explainable €3 billion, it was the €3.1 billion in deposit reduction by "Non-Euro Residents" - read Russians, who circumvented capital controls, and pulled a whopping 16% of their entire deposits held in the tiny and now completely insolvent island nation.

Total Cyprus bank deposits: no need to show the arrow at the right side.

And the monthly change broken down by sector:

Unless Cyprus implements some controls that truly work, at this pace its entire banking system will be completely deposit-free in under one year. And it will need to sell much more than all its gold to continue keeping the Troika happy and in compliance with all the future (because there will be many more) bailouts.

Source: Central Broke of Cyprus

 

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Wed, 05/29/2013 - 10:42 | 3607372 Dan Conway
Dan Conway's picture

I didn't see this coming!

Wed, 05/29/2013 - 10:48 | 3607394 MagicHandPuppet
MagicHandPuppet's picture

I consider them victorious by keeping the outflow this low.

Wed, 05/29/2013 - 10:57 | 3607426 Jumbotron
Jumbotron's picture

"I consider them victorious by keeping the outflow this low."

 

STARVE THE FUCKING BANKS.....FUCK 'EM ALL!!!

Wed, 05/29/2013 - 11:00 | 3607446 Boris Alatovkrap
Boris Alatovkrap's picture

Starve is take too long. Tree of liberty must occasionally be water by shed of blood.

Wed, 05/29/2013 - 12:31 | 3607750 Kiss My Iceland...
Kiss My Icelandic Ass's picture

Sigh. Poor sad Cypriot sheeple. Dutifully withdrawing 300 euro a day from the bankrupt banks, while the criminal politicians, bankers and oligarchs have long since left the scene.

Wed, 05/29/2013 - 12:53 | 3607819 Boris Alatovkrap
Boris Alatovkrap's picture

"He who panic first is to laugh loudest."

Wed, 05/29/2013 - 10:58 | 3607430 Boris Alatovkrap
Boris Alatovkrap's picture

Politburo is send out memo to oligarchs. Don't mess with Putin!

Wed, 05/29/2013 - 11:06 | 3607468 Ghordius
Ghordius's picture

though the Kremlin offered an Italian-style tax-debt forgiveness to all Russian state employees bringing back their Cyprus money and declaring it - without any penalties, if I remember correctly. and interestingly, this could account for this flow of funds, which of course is probably being waived over above the capital control restrictions by the Cypriot authorities

Wed, 05/29/2013 - 12:52 | 3607816 Boris Alatovkrap
Boris Alatovkrap's picture

For Russia, is better lose tax, than is to lose principal.

Wed, 05/29/2013 - 10:57 | 3607412 Ghordius
Ghordius's picture

I did not. And the situation is still not clear, to me. I still remember how the governor of the Cypriot Central Bank was talking about not going to instate any capital controls, with the whole Euro-Group and the rest of the ECB council nodding

then the Cypriot President came and found it insane. and pushed through capital controls. and now we have the "perfect situation" of all of them being to blame for one of the most murky and bungled banking restructuring episodes... ever

----------------

meanwhile I find plenty of websites citing the "Cyprus case" this way: "let's assume you have EUR 100k in Cyprus. "they" take away 40%. how much gold can you buy afterwards?" - which of course nicely forgets that those banks were utterly broke, the usual depositor would have been wiped out by 100%, and that if I remember correctly the whole "bail-in" procedure started above 100k

Wed, 05/29/2013 - 11:04 | 3607459 disabledvet
disabledvet's picture

The bulk of that money is from British pensioners "living on the twelve percent." no pensioner is safe now. That money is now flowing back to London "for safe keeping." how long before real estate prices collapse? "Just a Royal Marine away"?

Wed, 05/29/2013 - 11:16 | 3607480 Ghordius
Ghordius's picture

poor British and Dutch pensioners seem to have a knack of finding bank accounts that give high returns - do you remember IceSave? and how fast the British and Dutch governments made those account-holders whole when it went bust... and immediately presented the bill to Iceland? which then refused to pay?

nevertheless, as far as my sources go the bulk of that "foreign" money is not British pensioners (who possibly figure under the "domestic" blue part anyway - those who do live on Cyprus)

it is indeed Russians... and... Israelis

Wed, 05/29/2013 - 11:47 | 3607609 Herd Redirectio...
Herd Redirection Committee's picture

Why are we even talking nationalities when discussing a global group of usurious money changers?  They have not cared about national borders for some time, since before the Napoleonic Wars!

Wed, 05/29/2013 - 15:33 | 3608326 Herd Redirectio...
Herd Redirection Committee's picture

No, seriously, they are called the international banksters for a reason.

Wed, 05/29/2013 - 11:58 | 3607653 DosZap
DosZap's picture

meanwhile I find plenty of websites citing the "Cyprus case" this way: "let's assume you have EUR 100k in Cyprus. "they" take away 40%. how much gold can you buy afterwards?" - which of course nicely forgets that those banks were utterly broke, the usual depositor would have been wiped out by 100%, and that if I remember correctly the whole "bail-in" procedure started above 100k

Yes it FINALLY did,remember at first it was on everyones deposits 100k and below were going to take a 6.35% hit(unless you had less than 26,000k),and over 100k, approx 9.9%.(wound up far more).The ONLY reason they did not slap the 100k and under is that the fear of it starting an EU run on all the banks deposits, esp Spain, and Italy.

Thu, 05/30/2013 - 00:29 | 3609459 WallowaMountainMan
WallowaMountainMan's picture

as i recall, the over 100k was the intial eu proposal, the pres of cyp negotiated to make the under 100k crowd pay too, then could not deliver the votes and his party had to abstain,,,,,

then the capital control vote in parliament....etc

Wed, 05/29/2013 - 10:43 | 3607374 Hongcha
Hongcha's picture

Anyone could see this coming (Conway our msgs crossed); Merkel at al simply destroyed Cyprus without firing a shot.  Back to fishing village status.  Who in their right mind would deposit a pfennig in a Cyprus bank.

 

Wed, 05/29/2013 - 11:00 | 3607447 semperfi
semperfi's picture

"Who in their right mind would deposit a pfennig in a Cyprus bank."

Or, any bank, anywhere in the Western financial system.  This is the best 'idiot test' there has ever been - anyone with more than the minimum needed for bill maintenance in a bank account fails the idiot test.

Wed, 05/29/2013 - 10:43 | 3607375 Dr. Engali
Dr. Engali's picture

My question is ..who are the dumb asses making deposits in a system that won't let you have your money back on your terms? The stupidity never ceases to amaze me.

Wed, 05/29/2013 - 10:45 | 3607384 Hongcha
Hongcha's picture

Indeed Engali; the question is not 'who is taking it out' but 'who remains in?'

Oh you know, pensions and the like.  Savings of elderly who cannot move fast enough.

 

Wed, 05/29/2013 - 10:59 | 3607442 bank guy in Brussels
bank guy in Brussels's picture

With the ATM limit of € 300 a day or so it takes nearly a year to withdraw the € 100,000 some of them were left with after the confiscations

So article is right in the timing till the banks are completely empty

Nice above, Tyler's naming the link at the bottom 'Central Broke of Cyprus' ... the William-Banzai-style small touch of humour

Wed, 05/29/2013 - 11:05 | 3607465 RSloane
RSloane's picture

Good morning, Doc. People who need to be lied to, people who buy into the lie out of convenience, who have always done things a certain way and believes their government acts in their best interest will keep making deposits. I mean, what could go wrong?

Wed, 05/29/2013 - 11:25 | 3607525 Dr. Engali
Dr. Engali's picture

Good morning Sloane. I find it rather stunning the amount of people who actually believe that the governmnet is looking out for their best interest. I will never be able to comprehend that mindset.

Wed, 05/29/2013 - 12:00 | 3607664 shovelhead
shovelhead's picture

Loyal Patriots!

Hahahaha.

Wed, 05/29/2013 - 10:47 | 3607389 machineh
machineh's picture

As Switzerland trashes its banking privacy, maybe the gnomes should be paying attention to how fast Cyprus emptied out.

The Swiss could always return to raising cows and making cuckoo clocks.

Wed, 05/29/2013 - 11:57 | 3607651 Nobody For President
Nobody For President's picture

And chocolate. Don't forget the chocolate. And cheese.

Wed, 05/29/2013 - 12:02 | 3607668 shovelhead
shovelhead's picture

Swiss swindlers selling cheese with big holes in it.

Wed, 05/29/2013 - 10:48 | 3607395 Racer
Racer's picture

Well if bank robbers give you a chance to get your money out while you still have a little left , then why not GTFO!

Template have been put in place, you know they will do it again but next time it will be ALL the money that is left!

Wed, 05/29/2013 - 10:48 | 3607396 q99x2
q99x2's picture

BitCoin Last price:$128.01103

Wed, 05/29/2013 - 10:51 | 3607410 Confundido
Confundido's picture

Only 10%?? That corralito is working!

Wed, 05/29/2013 - 10:52 | 3607414 Navymugsy
Navymugsy's picture

I've got 37 Euros in my Hellenic Bank account. I'm doing my part to support the Cyprus banking system!

Wed, 05/29/2013 - 10:56 | 3607421 Bay of Pigs
Bay of Pigs's picture

FREE FAAAAALLLLLIN!!!

Wed, 05/29/2013 - 10:57 | 3607427 IridiumRebel
IridiumRebel's picture

I'd say we have our "No shit, Sherlock" post of the day.

Wed, 05/29/2013 - 10:58 | 3607433 Jason T
Jason T's picture

see this?  Labor camps for the Greeks who can't pay taxes ... 

http://translate.google.com/translate?sl=nl&tl=en&js=n&prev=_t&hl=en&ie=...

 

 

 

Wed, 05/29/2013 - 11:03 | 3607444 Headbanger
Wed, 05/29/2013 - 11:14 | 3607497 Sean7k
Sean7k's picture

The stupidity of government: put people in jail and then pay the cost to house and feed them. You can not make this stuff up. 

At which point does a bureaucrat actually think beyond the thrill of goose stepping and examine the cost in revenue, the loss of revenue, the sheer anger and hostility created against the regime? 

The Zionists seek to destroy all governments except their own. Is anyone paying attention? Banking, central banking, currency and credit control, political control, labor camps, total tyranny from puppet masters and no faces. 2700 years of history and the story remans the same. 

If we continue to support law and the means by which control is extended, we will reap terrible repression. We need a new direction and it isn't more control, it's less...

Wed, 05/29/2013 - 11:41 | 3607589 LostAtSea
LostAtSea's picture

fucking revolt already

Wed, 05/29/2013 - 11:01 | 3607452 TrustWho
TrustWho's picture

Only the beginning, this is in fact a breach of contract. Gold contract vs. Gold coins; 0.5% 10 yr JGB with BOJ determined to goose inflation to 2.0%, Daddy Bernanke printing federal reserve noted used to buy US treasuries....TRUST AND FAITH in our financial institutions are being crushed by a criminal system that is explicitly in "breach of contract" with its clients.

Wed, 05/29/2013 - 11:07 | 3607470 semperfi
semperfi's picture

GOVT  n, 1. criminals creating and using law to enrich themselves

BANKERS  n,  1. criminals counterfeiting money to enrich themselves, 2. criminals duping sheeple into debt-slavedom to enrich themselves

Wed, 05/29/2013 - 11:08 | 3607473 Son of Loki
Son of Loki's picture

Cyprus Consumer Confidence (I'm sure) is to be reported at "All Time High" however.

Wed, 05/29/2013 - 11:33 | 3607558 Jonas Parker
Jonas Parker's picture

After all Cypriot consumers are polled - both of them...

Wed, 05/29/2013 - 11:28 | 3607535 Bansters-in-my-...
Bansters-in-my- feces's picture

Only 10%...
Fuck are Cypriots dumb.

Ya get what you are asking for.

Wed, 05/29/2013 - 11:31 | 3607550 WTFUD
WTFUD's picture

It is no coincidence that Turkish Cypriots didn't lose money from the bailout as they do not participate in the euro ( turklira/brit£). They have their own banks, construct their own houses ( reasonably priced/affordable new builds) , commerce and therefore not subject to the unscrupulous gangster bankster mafia.
This may be a template/solution for the rest of the EU if the powers that be do not quickly decide to wrestle their shackles from TBTF and send Draghi & Co packing.
Be a shame to lose the unity of many of the institutions but the price is too high for the majority of its subjects.

Tue, 06/18/2013 - 12:17 | 3668449 icanhasbailout
icanhasbailout's picture

Once their banking system is freed of the burden of actual deposits, it's boom time.

Tue, 06/18/2013 - 12:20 | 3668474 jubber
jubber's picture

Euro still above 1:34  ???

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