In each cash in exchange for the assets you have on deposit with the bank that are frozen, you are given “shares” in the nearly bankrupt bank.
The logical outcome is that people all over the EU will move money out of their bank savings accounts and put them into other things, like fixed assets, gold, diamonds, land, or sovereign debt bonds, etc.
This could be basically be a really bad things for banks and financial institutions in general. Some credit unions which were open on Saturday essentially had a run as people tried to withdraw their money so it would not be confiscated on the formal date of next Tuesday with Monday being some kind of holiday.
This will change banking in Europe forever.
I sort of wonder if this is the idea behind the Occupy Whatever Movement's idea of tax the rich. Only it is all people who have scrimped to have a savings account as opposed to those who have not saved and are living hand to mouth and day to day.
The way a bank run would play out in America is one day you will wake up and find that only half your money can be withdrawn or used in any other way. The remainder will be placed (by Obama/Bernanke or their ilk) in long term Treasuries of some special non-negotiable kind for your own good that can only be cashed in 2—3-5-10 years from now. Just think of them as Federal Reserve IOUs
The big impact will be on businesses. They will be the ones most likely to have more than 100K on deposit. Regular people who have 100K are more likely to have it invested.
The net effect on businesses will be to leave much less money in the bank, and work off a line of credit so that their net balance stays close to zero or slightly negative.
I'm going to guess that the bond holders had more "pull" with the EU bureaucrats than common depositors did.
This isn’t a tax on the rich. Not really. The wealthy do not have most of their funds sitting around in a bank account. This is a tax on the middle class and upper working classes, imo.