Another month, another update on the inefficiency of Cypriot capital controls, where following the latest release by the central bank on the May level of deposits in the banking system, we learn that total cash holdings in Cyprus banks dropped by another EUR 1.4 billion in May to EUR55.9 billion, and 23% lower from the same month last year. And with ongoing and unchecked deposit flight continuing, with EUR 14 billion in cash pulled or confiscated since the start of the year, one can see why the administration and the president are about to throw in the towel and demand, this time for a real, a much bigger bailout for Cyprus to plug the ever bigger gaping liquidity hole in the local banks as otherwise all that good money chasing bad will be for nothing.
In the meantime, expect deposit flight to continue as anyone with half a brain can finally see the writing on the wall, if only with a slight delay and following much personal losses.
Monthly Cyprus deposits:
Monthly change in Cyprus deposits:
Source: Cyprus Central Bank