Time to learn more about Cyprus.
Megan McArdle tries to make sense of the small nation's big banking problems.
The Cypriot parliament may have thought they were giving the government more leverage to get a better deal. Or they may have thought that giving depositors a haircut in order to keep Russian money from fleeing the banks was likely to bring down their government. And in that latter supposition, they may have been right; they certainly know more about Cypriot politics than I do. Are Cypriot small depositors really supposed to lose their hard earned life savings--which they were promised had deposit insurance!--because a bunch of German politicians demanded it?
We might be entering an era of investor haircuts of their holdings.
Somebody's got to pay, and somebody's going to be angry with what happens.