General Discussion
Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsA Furious Cyprus Begins Investigating Who Breached The Capital Controls
Banks have been closed and accounts frozen in Cyprus recently. Nevertheless, large amounts were moved out of the country's crippled financial institutions on the eve of the bailout package. Lawmakers are suspicious and are investigating both the government and the Cypriot central bank.
--
Most of all, though, the central bank head has been harshly criticized due to suspicious capital flight from Laiki and the Bank of Cyprus, the two institutions that have been hit hardest by the Cypriot banking crisis. There are indications that large sums flowed out of the two banks just before the first bailout package was signed in the early morning hours of March 16. At the end of January, some 40 percent of all savings held in Cypriot accounts were on the books of those two banks. Since then, however, much of it has been transferred elsewhere, despite orders from the central bank that accounts at the two institutions be frozen.
The Cypriot central bank has defended itself by saying that it was impossible to completely prevent all transactions, despite the account freeze. Much of the money was withdrawn from overseas, where Cyprus had no authority. Branches of Cypriot banks in non-euro-zone countries such as Russia and Britain do not answer to the European Central Bank. Their liquidity is controlled by central banks in those countries.
Such a defense is nothing less than a voluntary admission of impotence. Holders of smaller savings accounts have been unable to access much of their money for almost two weeks, companies have been unable to pay their suppliers and across the country people are concerned that their salaries will not arrive on schedule on the first of the month. Meanwhile, rich businesspeople and those with connections overseas have been able to transfer their money into foreign accounts.
http://m.spiegel.de/international/europe/a-891168.html#spRedirectedFrom=www&referrrer=http://www.zerohedge.com/news/2013-03-27/furious-cyprus-begins-investigating-who-breached-capital-controls
Duer 157099
(17,742 posts)Will it ever end?
dballance
(5,756 posts)Apparently someone paid some banker very well to alert them so they could remove their funds in this situation.
dipsydoodle
(42,239 posts)Branches of Cypriot banks in non-euro-zone countries such as Russia and Britain do not answer to the European Central Bank. Their liquidity is controlled by central banks in those countries.
If the withdrawals or movements were either in £'s or Rubles only the relevant local rules would've applied. Obviously the subject of leaked information is a different matter. Given the likely limited number of people privy to such information shouldn't be too difficult for the culprit to be tracked.