It's a curious story over Cyprus, the bank problem, and the Russian billionaires.
The Russians had been around Cyprus for at least a decade, ease of entry, warm climate, and a safe place to relax.
When January of 2008 rolled around, the new currency of Cyprus...was the Euro. The Russians brought their money and deposited significant sums immediately
You see, there's really no trust in Moscow with the Russian banking sector. So they wanted a European spot to park their money and to feel some trust. Cyprus made sense.
There's a strange at this point. Cyprus, as of 2008....was run by a President from the Communist Party on the island. Most of the cabinet officers....were generally of the same persuasion. The finance minister? You can figure that he was mostly a friend of the party or better.
What the banking sector did, with any clear understanding by the Russian billionaires ...was to immediately take the cash and flush it into Greek bonds. If you had to pick the worst possible time to do something like this....this was it.
Did the Russians grasp what they were signing up to? I seriously doubt it. I imagine that the banking folks simply sat through meetings with their government counterparts, and eventually came to feel that helping Greece with these bonds....made sense. If you'd brought this up with a French banker, a German banker, or even a Japanese banker.....they would have laughed and suggested to go put the money into a safer environment.
So weeks pass. Months pass. The money just plain evaporated into thin air. Greece and it's bonds were going to ever be a positive investment.
I would imagine by the spring of 2012....the bankers were aware of the mess, and just worried over how to explain massive losses. If the Russians had never come or invested the billions....none of this would have occurred. Instead, there's nothing much left now.
The EU folks understood the mess, but didn't have any compassion for the Russians. This was a money pit with no rules. The Cyprus banking atmosphere was a joke. And the lack of any taxation on the Russians bothered most everyone. No one wants to hand European cash over to the Cyprus banks...which would then hand it straight to the Russians.
The Russians should have hired one smart economic expert, and then listened to him. They could have diversified their money into a thousand different ventures, and settled for some fairly safe bets. Instead, they listened to a couple of communist political hacks who talked up Greek bonds.
For pity? Well....yeah, it's sad that you had a billion Euro today, and tomorrow....it's just half-a-billion probably.