Cyprus Bailout Risks Europe Bank Runs - Business Insider

This Crazy Cyprus Deal Could Screw Up A Lot More Than Cyprus…Henry Blodget | Mar. 16, 2013, 9:09 PM |

You can be forgiven for thinking that you don’t need to give a hoot about whats going on in Cyprus this weekend.After all, its just a little island somewhere in the Mediterranean.But whats going on in Cyprus could actually matter — not just to the rest of Europe, but to the rest of the world.Heres the short version of whats happening:Cypruss banks, like many banks in Europe, are bankrupt.Cyprus went to the Eurozone to get a bailout, the same way Ireland, Greece, and other European countries have.The Eurozone powers-that-be gave Cyprus a bailout — but with a startling condition that has never before been imposed on any major banking system since the start of the global financial crisis in 2008.The Eurozone powers-that-be mainly, Germany insisted that the depositors in Cyprus’s banks pay part of the tab.Not the bondholders.The depositors. The folks who had their money in the banks for safe-keeping.

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