So, anyone have any useful suggestions or solutions?

I think that the risks of a run are greatest in the periphery, though I would also expect a lot of people withdrawing funds that are above the deposit limit and simply spreading them around so no bank account has more than €100 000. Though in some countries there simply are not enough banks for that so people will have to buy government bonds which are a risk of their own.

Being in the Euro they could set up a bank account in another country.

Greece, Italy or Spain should be a safe bet

I see Cyprus MP's have tonight voted against stealing people's money so now the EU won't give them the €10bn bailout so what now - Does Cyprus now get declared bankrupt?

Some of the money was from Greece. Sort of out of a frying pan into the fire for them. It is looking like there will be a bank run when the banks open, though will they be able to get the money out of the country?

Apparently the owners of most of it'd have to make the trip from Russia to get their money out in cash. Cyprus's passport logs should be interesting reading for Interpol for the next couple of weeks...

It all depends whether they have capital controls in place. If they don't they can simply transfer it to another tax haven. They could still have limits like the US on carrying more than $10 000 of currency which would also be problematic. Though I suspect that few criminals will venture there they might send lawyers and accountants, as respectable middlemen. Still could be interesting passport logs as you said.

Edit. It looks like capital controls will be in place under Article 65(b), and that there will be a bank failure. Laiki Bank looks like it will not reopen next week. There are even thoughts that if the banks are re-capitalised there will still be bank runs.

They have the blessing and the curse of being tiny. Nobody cares what happens to them, but they care a alot bout what message it sends.

The Eurozone can afford to lose them, but has to make an example of them if they if they left the Euro messily - and in so doing annihilated their treaty with the EU. They would lose trade because they aren't going to stay in the single market, and until they clear their debts they aren't going to be welcome back. If they print their own currency they will have to devalue it more or less weekly for years. They would probably do better to switch to the US$.

But they are also small enough that were they willing to make strategic concessions, Russia might well choose to bail them out. They would probably want priority access to Cypriot gas fields - these are supposed to be massive, but little Cyprus has complicated relations with its neighbours and won't have an easy time setting up a pipeline for it - partnering with Russia might be good for them if Russia can talk with Turkey on their behalf. They would also want Cyprus to join the Russian customs union that is a very weak alternative to the single market.

Or it is vaguely possible that the Euro zone would want to stage a managed exit on fair and reasonable terms. If the back room conversations are turning towards the idea of actually encouraging Greece to leave, then a practice run with Cyprus would be ideal, and a soft landing for those guys would be necessary. Shake hands, part ways, forgive a portion of their debt to Eurozone banks, and hand them over to the tender embrace of the IMF.

It's too late now for the Eurozone to do what it should have a long time ago - set up a proper way to flush mismanaged economies from its books. True chaos could encourage that thinking, but it would be horrible for the Cypriots. They'd wish they hadn't whined about a 6.75% savings tax if that happened.

This is still a continuation of the 2008 banking crisis.

So, where are you putting your money then?

Unless you are in a high risk country Ireland Spain Portugal Greece or Italy, you should be fine. The problems in Cyprus were known about last year from the impact of the bond holder losses imposed by Greece. Spain has had billions leave the country over the last year anyhow, same for all the EZ periphery. There could be a greater amount stuffed in mattresses all across Europe, but mainly in the south. If there were going to be problems here there would be other signs, like changes in the deposit protection or another problem. For most people though they really have little option as they are living from paycheque to paycheque so the accounts are pretty empty. Though will this mean that those in overdraft pay nothing? Those that would be hurt most would be businesses.

In Cyprus there was a company talking on the BBC saying that even the customs office wants cash, as they do not trust cheques or other bank transfers. When government departments only accept cash then you have a problem.

Given that one of the aims of this levy was to target allegedly dodgy Russian money held in Cyprus I wonder how the EU will react to the prospect of Russia bailing out or buying outright the Cypriot banks and as a consequence also managing to grab a significant chunk of Cypriot gas reserves.

I doubt that they had a clue. Most Russian money is legal, mob money is a small fraction. Overall they have handled this badly.


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they can have 9.9% of my overdraft any day ...

I'm surprised they didn't also try to add 9% to people's mortgages there to find it.