Submitted by Tyler Durden: While most of the western developed economies become more and more centrally planned and creative destruction is avoided at all costs (for fear it will be the straw that breaks the fractionally-reserved, rehypothecated camel's back of the financial system - and therefore sovereign financing); it appears ironic that Russia is playing capitalist hardball with the losers from the Cyprus 'solution'. Russia's First Deputy Prime Minister Igor Shuvalov, announced this weekend, that "if someone gets stuck and loses money in those two biggest banks, that’s really too bad, but the Russian government isn’t planning to do anything in this case."As Bloomberg reports, Shuvalov told reporters last month that Russia may ultimately benefit from Europe’s decision to target deposit holders. By setting that precedent, Europe has cast doubt on the reliability of its banks and makes Russia’s financial system look comparatively more attractive - but is "closely monitoring" the situation around Russian Commercial Bank, a Cypriot unit of state-run lender VTB Group, adding that VTB's exposure in Cyprus is "absolutely manageable.
So, in the new normal, the USA socializes losses but the ex-USSR sticks to its new capitalist roots?
SourceRussia won’t bail out people or companies that stand to lose money held at Cyprus’s two largest banks, First Deputy Prime Minister Igor Shuvalov said.
“If someone gets stuck and loses money in those two biggest banks, that’s really too bad,” Shuvalov said in an interview late yesterday on Russian state television. “But the Russian government isn’t planning to do anything in this case.”
Russia turned away requests from Cyprus for additional financial assistance last month after criticizing plans that would have forced losses on insured deposits.
Russia’s government bristled at suggestions that it was responsible for bailing out the euro member as politicians from states including Germany alleged that Cyprus was used to launder illegal Russian money. Funds held by Russians on the island aren’t all illegal, Shuvalov said.
‘Closely Following’The government is “closely following” the situation around Russian Commercial Bank, a Cypriot unit of state-run lender VTB Group, as it determines what further support may be offered, Natalya Timakova, a spokeswoman for Prime Minister Dmitry Medvedev, said in an e-mailed statement today. VTB had the “most exposure” to the unfolding crisis of any Russian bank, Standard & Poor’s said March 27.
VTB Group’s exposure in Cyprus is “absolutely manageable,” First Deputy President Yuri Soloviev said in an interview with Bloomberg Television’s Guy Johnson and Francine Lacqua on March 28. The company’s assets in Cyprus are an “integral part” of VTB Group, he said.
Russia’s StanceRussia would be willing to discuss “specific instances,” where companies partly owned by the state or individuals are facing “serious losses,” from deposits held at Bank of Cyprus Plc or Cyprus Popular Bank Pcl (CPB), according to Shuvalov.
“We’re prepared to consider it, publicly, transparently, and here in Russia,” he said. “But that absolutely doesn’t require any assistance to Cyprus.”
Little Impact“We believe the majority of Russian money in Cyprus belongs to private individuals and small and medium-sized companies, while large Russian entities are unlikely to be deeply affected,” she said in a note today. The “majority” of those deposits are above the protected limit, she said.
Shuvalov told reporters last month that Russia may ultimately benefit from Europe’s decision to target deposit holders. By setting that precedent, Europe has cast doubt on the reliability of its banks and makes Russia’s financial system look comparatively more attractive, he said.