March 26, 2013
How much cash fled Cyprus prior to bailout deal?
While the Cyprus government was negotiating its 13 billion euro bailout with the EU, a large, unknown sum of euros were being siphoned out of its two major banks, despite capital controls that were supposed to prevent it. Although the major banks were supposed to be closed, some depositors were able to access their funds through a variety of means. And no one knows how much cash left the country. Reuters: EU negotiators knew something was wrong when the Central Bank of Cyprus requested more banknotes from the European Central Bank than the withdrawals it was reporting to Frankfurt implied were needed, an EU source familiar with the process said. "The amount the Cypriots mentioned... on a daily basis was much less than it was in reality," the source said. Confusion over just how much money was pulled out of Cyprus' banks is illustrative of the confusion surrounding the negotiations as a whole. Representing just 0.2 percent of the euro zone economy, Cyprus nevertheless...(Read Full Post)