MOSCOW, April 5 (RIA Novosti) – Russian President Vladimir Putin said on Friday that the recent financial meltdown in Cyprus proved how “risky” and “insecure” investments in Western financial institutions can be.
“The more you ‘pinch’ foreign investors in the financial institutions of your countries, the better for us, because the affected, offended and frightened (not all of them, but many) should, as we hope, come to our financial institutions and keep their money in our banks,” Putin told German broadcaster ARD in an interview at his Novo-Ogarevo residence near Moscow.
Asked whether Moscow was angry that the European Union did not ask Russia for help, though many Russians were affected by the financial crisis in Cyprus, Putin replied: “Of course not.”
“On the contrary, I am even glad, to some extent, because these events have shown how risky and insecure investments in Western financial institutions can be,” he said.
The president noted that at some point, Russian investors were squirreling away their savings abroad, including in Cyprus, but it was done due to the shaky financial situation in Russia.
“Frankly speaking, they did not feel they could rely on the Russian financial system. And, indeed, it was not reliable. Just recall the year 1998 – an economic collapse…there were widespread fears regarding the future of the financial system,” he said.
However, Putin said, “We not only managed to preserve the integrity of our financial system when the [global financial] crisis hit in 2008, we strengthened it without letting a single financial institution collapse.”
Russian banks and companies have favored Cyprus since the 1990s, taking advantage of the nation’s low taxes and lax business regulations. Russian banks held about $12 billion on deposit with Cypriot banks at the end of 2012, while Russian corporate deposits accounted for another $19 billion, according to estimates by the international rating agency Moody’s.