When we reported yesterday [2] 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.