It costs quite a lot to keep a banker safe. Just ask Jamie Dimon, who was given $68k by JPMorgan purely towards the protection of his personal residence in 2012. Given current circumstances you might think, therefore, that Cypriot security services would be cashing in and protecting the island’s bankers. Apparently not.
Cypriot security firms say there’s been little additional call on their services in response to the financial crisis. “There’s been a big increase in demand for CCTV cameras and home security services since 2008 because unemployment and burglaries have increased in Cyprus,” said Jeff Greenwood at Nicosia-based Akme Securitas. “But we haven’t seen any further increase in the past few weeks.”
Together with G4S, Greenwood said Akme has been drafted in to help protect branch staff when Cypriot banks open tomorrow. But there’s been no call for ‘close protection’ of senior Cypriot banking personnel, he said. “Most of the close protection work we do is still with diplomats and chief executives,” he added.
Senior Cypriot bankers have some reason to be worried for their safety. Mark Galiotti, a professor at New York University and expert on the Russian security services, said the Russian mafia had a lot of money in Cyprus: “Some of the money in Cyprus is thoroughly dirty, although most of it is only slightly grubby,” said Galiotti.
Estimates suggest Russian deposits in Cyprus total €35bn. 40% or more of deposits in excess of €100k at the Bank of Cyprus will now disappear in a ‘haircut.’ Russian mafia members seem likely to be unhappy about this. However Galiotti said reprisals are unlikely: much of the mafia’s money appears to have been spirited away from Cyprus despite the bank’s being closed, and mafia clients won’t want to alienate the offshore banking community as they look for new havens for their cash. “It’s not as if these gangsters will have interacted with Cypriot bankers directly,” Galiotti added. “There’s a whole substrata of facilitators who they will work through. If anyone should be worried about the situation it is not Cypriot bankers, but Russian money managers who hyped Cyprus as a great place to put cash. They might be facing some pointed questions now.”
For the moment, Cypriot bankers seem unperturbed, both about their safety and their jobs. Yiannis Kypri, chief executive of the Bank of Cyprus has been removed, but Cypriot financial services recruiters say Cypriot bankers haven’t been rushing to find new jobs elsewhere. “A couple of private bankers have approached me to see if I could find them jobs in other jurisdictions, but most people are holding fire,” said Chrissy Tasou at search firm AP Executive. “There will certainly be some job cuts. We have some very educated people in Cyprus and their talents will be unwanted here,” she added.
Maria Kyriakou, a commercial lawyer and partner at law firm Andreas Neocleous & Co in Nicosia, said Cypriots are definitely angry with their banking professionals. “Russians, Germans and English people here are all unhappy with the Cypriot bankers. We blame them for investing in Greek bonds, which lost so much money,” she said. “This leaves a very bitter taste. The Cypriots are a well-organised and well-educated people and this miscalculation has cost us years of hard work.”
Rather than venting their rage on local finance professionals, Kyriakou said the Cypriot people will put their bitterness to more constructive use. “We will make it through. Cyrpus is the fourth largest international shipping centre in the world and we have the prospect of becoming the energy centre of the Mediterranean,” she told us. “We will work hard to regain our credibility.”
In the meantime, Cypriot bankers can at best hope for invisibility as the economy reorients itself and Russian money disappears.
Gill Armstrong of Armstrong Security in Cyprus, said bankers have never been big users of bodyguards in Cyprus anyway. “Most of that sort of work here comes from Middle Eastern Royal families and oil executives,” he informed us.