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Miami Herald: Cuban bank deposits abroad plummet from $5.65

Cuban bank assets deposited in an international group of financial institutions showed a second stunning plunge in a row, with the total nose diving from $5.65 billion on Sept. 30 to $2.8 billion at the end of March.

“Two consecutive quarters of massive bank withdrawals signal a drastic policy change in Cuba that is not the result of temporary factors,” wrote Luis F. Luis, a former chief economist at the Organization of American States who has been monitoring the deposits.

The Bank of International Settlements (BIS) regularly reports banking statistics, such as deposits by Cuban banks, from 43 major Western and emerging economies and offshore financial centers around the world.

Countries, such as Cuba, usually keep deposits in BIS member banks and other financial institutions to pay for or guarantee the purchases of goods abroad.

A BIS report on June 4 showed Cuban bank deposits in BIS member institutions had plunged from $5.65 billion on Sept. 30 to $4.1 billion on Dec. 31. The latest BIS report showed they dropped to $2.86 billion at the end of March.

“What appears to be going on is a major portfolio reallocation of Cuban international reserves and assets away from Western financial centers and possibly into banks in countries such as Venezuela and China which do not report to the BIS,” Luis wrote.

One reason for the shift may be Havana’s concern over the stability of banks in Spain, France, Germany and The Netherlands that held much of Cuba’s assets, he noted. But there might be another reason because the European Central Bank will have to support those banks in a crisis…..Read More

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Posted by on Jul 31 2012. Filed under Cuba Related, Current News. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.

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