Concerning Russian Money in Cyprus... My wife is from one of the Former Soviet States. When we honeymooned, as well as when I came back from my tour in Iraq in 2006, we spent time in Cyprus. Cyprus welcomes those from the former Soviet Union to travel and vacation there. Trying to go to Europe is much more difficult and more expensive for them. This is why Russians and others from Eastern Europe go to Cyprus for travel, and most likely why their money ends up there, too. It is easier to put your money in a place you can travel easier and establish relationships with your banker then to put it in Europe, where travel may be more difficult. Hence, will that money flow into Europe? Hard to say. This is my opinion.
Sounds to me like Russia is going to not only allow Cyprus sink, Russian businesses that have money deposited there are on their own! Russia does not like it when money that should be in Russian banks moves offshore!
MOSCOW (Reuters) - The Russian government will not aid businesses that have lost money in Cyprus, First Deputy Prime Minister Igor Shuvalov said, underscoring Moscow's resolve to clamp down on the flight of capital to offshore financial centers.
Major account holders, many of them Russian, will lose up to 60 percent of their deposits over 100,000 euros ($128,400) at Cyprus's largest bank under a European Union bailout to save the Mediterranean island from bankruptcy.
If Russians lose money "it's a terrible shame, but the Russian government will not take any action in such a situation," Shuvalov was quoted by the Interfax news agency as saying in a television interview on Sunday night.
Ireland has done much to improve their economic outlook, but I think there is still a lot of uncertainty remaining as to the outcome.
The depositors in Cyprus probably learned a valuable lesson, that capital preservation is more important than chasing yield.
I think banks in countries will strong financial positions and a long history of lack of default will be the big winners. The flight will likely be to safety.
Anything is possible but there are banks closer than Ireland to move money! Besides that, the early reports indicate there is not a mass drain of assets from the Cyprus banks. This looks to be a non event.