UPDATE 1-Cyprus poses no systemic threat to Russian banks -Russia central bank

Fri Mar 22, 2013 6:38am EDT

By Oksana Kobzeva

MOSCOW, March 22 (Reuters) - The financial crisis in Cyprus poses no systemic threat to the Russian banking system, a first deputy chairman of Russia's central bank, Alexei Simanovsky, said on Friday.

"I don't see any systemic or individual threat here," Simanovsky said, after the regulator conducted an "express-analysis" of links between Russian banks and Cyprus.

Cyprus's finance minister left Moscow empty-handed on Friday after Russia turned down appeals for aid, leaving the island to strike a bailout deal with the European Union before Tuesday or face the collapse of its financial system.

The Russian economy has a relatively low dependency on its banking system, with the ratio of total assets to gross domestic product ratio at 79.4 percent as of March 1, compared to over 100 percent in some developed countries.

After a proposed levy on bank deposits was rejected, Cypriot lawmakers are looking into other measures to raise at least part of 5.8 billion euros ($7.50 billion) required by the European Union as a condition for Cyprus to secure a 10 billion euro bailout.

Cypriot authorities are calling to impose capital controls to stem a flood of funds leaving the island when banks reopen, which they are expected to do on Tuesday after a week-long shutdown.

Ratings agency Fitch said on Thursday that Russian banks could face significant operational risks only if the crisis was prolonged and brokers and became reluctant to trade with Cyprus-based counterparts.

Russian banks do not see significant losses from the proposed levy.

Russian banks had $30 billion to $40 billion tied up in cross-border loans to Cypriot firms at the end of 2012 and some $12 billion on deposit with Cypriot banks, Moody's said earlier.

A couple walks along the rough surf during sunset at Oahu's North Shore, December 26, 2013. REUTERS/Kevin Lamarque

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