Putin says Russia may profit from Cyprus banking crisis

(MOSCOW) - Russian President Vladimir Putin said Friday that the banking crisis in Cyprus showed up what he said was the unreliability of Western financial institutions, saying it would encourage Russian depositors to invest at home.

"The more you 'pinch' foreign depositors in the financial institutions of your countries the better for us," Putin said in an interview ahead of his trips to Germany and the Netherlands on Sunday and Monday.

"Because all the affected, offended and frightened (not all but many) should -- we hope -- come to our financial institutions. And they will keep their money in our banks," Putin told Germany's ARD television.

The Cyprus banking crisis is expected to hit hard Russians who are believed to have more than $30 billion in corporate and private deposits parked on the debt-hit island.

Asked by his German interviewer whether he was offended that the European states had not consulted him on the bailout proposals, Putin replied:

"Of course not. On the contrary, to a certain degree I am even glad because this exposed all the inefficiency and all the unreliability of placing deposits in Western financial institutions."

Putin also said that European states should fully accept blame for the Cyprus crisis because they allowed the offshore zones to blossom in the first place.

"Did we create this offshore zone? It was the European Union that created it. Or Cyprus authorities created it and EU authorities allowed it," Putin said.

"Is it what, the only such zone created by EU countries? Don't we know about Britain's island 'eurozones' or some other zones?" he said referring to havens like the British Virgin Islands.

"If you believe this is bad then shut them down. Why have you held accountable for all the problems which in this case appeared in this country depositors of whatever nationality they may be -- the British, Russian citizens, the French or anyone else?"