[Mentar]

Originally Posted by Vallen Chaos Valiant

Nations are free to set terms when they loan money to one another. That's how it is always done. But fractional reserve is the literal cornerstone of modern banking, and threatening savings accounts means threatening the very core of the financial system.

That's funny ... why didn't the Cypriotic banks think about that earlier? Ask yourself: How do you reconcile responsible banking with "oops, lookie there, we have losses in the range of 80% our GDP"?

I don't have any issues with nations negotiating with one another. My comments concern the suicidal act of triggering a bank run.

And this is what is raising my hairs in wild anger. In case you haven't noticed, the disaster has already happened. The banks are BANKRUPT. The depositors already HAVE lost 60% of their money, and the EU plan allows them to limit these losses to 10-15% instead. But rather than thanking the EU to save them 40-50% of their deposits, they scream bloody murder. Or, to be more correctly, it's mostly the uninformed nationalistic mob who does.

It was never an EU demand to involve the "small people". Small people don't have saving accounts of 100k+ Euro. This was the brilliant idea of the Cypriotic politicians before they turned a full flip-flop and the media started the riots.

So, the "Bank Run" was bound to happen under all circumstances anyway, unless the EU ponies up the full amount just for the sake of keeping it all under wraps. And that - I'm sorry - would not only be wrong, it would also be unsustainable. Sure, we could do it the US way and just print 80 billion Euro each month to distribute them wherever, but that would be irresponsible.

The Cyprus banking sector has to go McSplat and start anew, this time without the bloated offshore banking racket. One more tax haven less. Expensive hit with a 10 billion Euro bill, but at least this money isn't completely wasted.

People of Cyprus are going to empty their savings ASAP, this is now the reality. The question is what is happening after that.

People of Cyprus won't be touched much anyway, how many people do you expect to have 100k+ Euro deposits in their bank accounts? It will go just like Greece... after half a year, much of the money will come back. And in the meantime, some Russian oligarchs took a bit of a hit. My heart isn't bleeding much.