Posted on Tuesday, 07.31.12
Cuban bank deposits abroad plummet from $5.65 to $2.8 billion
A new report shows that Cuba's bank deposits have fallen from $5.65
billion at the end of September 2011 to $2.8 billion at the end of March.
By Juan O. Tamayo
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
"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
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.
"A more powerful reason may be concerns regarding the legal
vulnerability of having financial assets in Western banks which may be
subject to forfeiture by the courts," Luis added in a report emailed
Monday to El Nuevo Herald and others.
Several Cuban exiles have won multi-million dollar judgments against
Havana in U.S. courts and are now trying to collect the money. The
largest was the $2.8 billion awarded last year by a Miami-Dade judge to
CIA and Bay of Pigs veteran Gustavo Villoldo.
Luis noted that it makes sense for Cuba, whose main trade partners are
Venezuela and China, to shift some deposits to banks in those countries
"but not the kind of massive displacement that is apparently taking place."
Cuban officials also may have drawn down the country's deposits to
settle outstanding debts, Luis speculated after the BIS report on June
4, or turned them into gold in hopes of protecting themselves from
global economic swings.