Sunday, April 7, 2013

Money Fled Cyprus as President Fumbled Bailout

Annika Breidthardt, Luke Baker and Michele Kambas
As new President Nicos Anastasiades hesitated over an EU bailout that has wrecked Cyprus's offshore financial haven status, money was oozing out of his country's closed banks.
In banknotes at cash machines and exceptional transfers for “humanitarian supplies,” large amounts of euros fled the island before and after Cypriot lawmakers rejected a levy on all bank deposits.
No one knows exactly how much money has left Cyprian banks, or where it has gone. The two banks at the centre of the crisis have branches in London that remained open over 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.
While ordinary Cypriots lined up 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.
German Finance Minister Wolfgang Schaeuble said the bank closure had limited capital flight but that the ECB was looking closely at the issue.
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