25 Jul 2013

Cyprus Deposits Plunge At Fastest Rate In History

Tyler Durden's picture With capital controls like these who needs bank runs.
Perhaps the most underreported news to come out of Europe this morning had nothing to do with PMI or employment or credit creation in the Eurozone. It had to do with Cyprus - the insolvent island that everyone forgot - and which since its March bail in has been left for a state of Schrodingerian suspended animation, where it is either alive or dead depending on what propaganda wave function it had to satisfy.
Recall that many, most certainly us, said that the imposed capital controls would have no impact in stemming the massive outflow of what money is left with the insolvent banking system, and very soon the entire banking system would remain deposit, and thus funding, free requiring more and bigger bailouts. Sure enough, this was just confirmed when the Central Bank of Cyprus reported that not only did local deposits drop to a level not seen since 2007, plunging by the second fastest absolute amount in history, but declined at the fastest rate ever!
And if the current outflow is not stemmed, there won't be a single Euro (Cypriot Euro, not European Euro) in deposits left in under one year.

Total Cyprus Bank Deposits:

Monthly Change in Deposits:

And rate of deposit change - biggest drop ever.

The good news for all other insolvent European peripheral countries is that the local depositor base is absolutely convinced that what happened in Cyprus is a one-time, non-blueprint event and have zero reservations about keeping their own deposits in place with the local banks, where they are perfectly safe and sound.
Source

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