Actually they will probably get more foreign depositors in solvent states now that they know they won’T be required to carry as much of the load for those who are insolvent. I don’T really understand the pity for Cyprus who is being required to give something back in return for a bailout. This will cut back on cries for bailouts in future. I don’T see this as a bad thing.
Cyprus is “giving back” other peoples’ money. Cyprus is a European Union member state. Cyprus is being forced to confiscate deposits by the EuroGroup, which are all the various heads of the central banks in EU member states. If no one can see how this will destroy trust in the financial system of the EU as a whole, there’s a really big train wreck coming. I don’t think they’re quite that stupid. Arrogant, yes. Stupid, no. Not on the whole.