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Cyprus: What Were They Thinking? and some other notes | Some of it was true...
The central mystery boils down to "WHAT THE HELL WERE THEY THINKING?". Haircutting Taxing small depositors doesn't only violate the principle of social equity, it hurts a lot of people and creates political and logistical difficulties without playing a central part in raising the cash.
Some metrics around deposit distribution: poor people have very little cash. I haven't managed to track down statistics on Cypriot deposits (if they exist) but: in the UK 2% of depositors account for 49% of deposits. The median savings of the bottom half by income of the population is £400. Cyprus is an only marginally more equal society than the UK (Gini of 0.3 vs UK 0.33), a somewhat poorer one, so it doesn't seem unlikely that a floor of say EUR50,000 would massively reduce the number of people captured but not hugely impact the amount of deposits. (links to follow)


Any idiot can face a crisis - it's day to day living that wears you out.
by ceebs (ceebs (at) eurotrib (dot) com) on Sun Mar 17th, 2013 at 03:14:03 PM EST

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