We couldn’t set the precedent of banks actually paying for their own mistakes! I’m sure that’s much more important than preventing a run on the banks:
ATHENS — In a move that could set off new fears of contagion across the euro zone, anxious depositors lined up at cash machines in Cyprus on Saturday to withdraw money hours after European officials in Brussels required that part of a new 10 billion euro bailout must be paid for directly from the bank accounts of ordinary savers.
The move — a first in the three-year-old European financial crisis — revived fears that bank runs could be set off elsewhere in the euro zone, especially after a top European official on Saturday declined to rule out similar measures on depositors in countries beyond Cyprus.
Yup this’ll work. If the banks can give a security interest in its depositors’ accounts ahead of its shareholders equity, the only rational response is to withdraw funds before the default that is set up by this tactic. I wonder if Putin can get his funds out in time.
Damn, is this some sort of sick joke, or have things gotten so bad that stealing money out of people’s bank accounts is on the menu?
I see ropes and lampposts in the future of the cypriot political/financier class if they actually try this.