Market Update from Mike Kuta

 Russia Won’t Bail Out Cyprus Savers Facing Deposit Losses.

Russia 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 broadcast 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. President Vladimir Putin ordered the government to resume talks with the cash- strapped Mediterranean island on restructuring its 2.5 billion- euro ($3.2 billion) loan granted in 2011 after an agreement reached last month over a new European-led rescue. 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. “There’s money on which taxes weren’t paid, and there’s money where taxes were paid but for some reason people decided to keep it in Cypriot banks,” he said. Russia 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.

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