Russian deposits to take hit as Moscow mulls lending more

Tim Wallace
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POLITICIANS in countries like Germany are thought to be particularly keen to hit the biggest depositors in Cyprus the hardest in part because of its reputation as a haven for money launderers.

More than one-third of deposits are foreign-owned, with Russians making up one of the largest contingents. The majority of Russian deposits are thought to be above €100,000 (£85,443) while domestic savers are largely below it, meaning foreigners would bear the brunt.

“With a lax anti-money laundering framework, many policymakers in Europe were not keen to provide a bailout of depositors, in contrast to previous troika programmes,” said Barclays analyst Antonio Garcia Pascual.

“Part of the agreement involves steps to improve the anti-money laundering framework.”

But Russia’s government has been generous towards Cyprus in the past, lending €2.5bn to the troubled government in 2011. It is now considering easing the terms on those loans, and potentially lending more to ease the country’s woes.