Cuban bank deposits abroad continue massive migration
By JUAN O. TAMAYO - McClatchy Newspapers
MIAMI -- 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 R. Luis, a former chief economist at the Organization of
American States, who has been monitoring the deposits.
The Bank for International Settlements, or BIS, regularly reports
banking statistics, such as deposits by Cuban banks, from 43 major
Western and emerging economies and offshore financial centers around the
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 that amount 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
European banks 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 McClatchy Newspapers and others.
Several Cuban exiles have won multimillion-dollar judgments against
Havana in U.S. courts and are now trying to collect.
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.