March 16, 2013
WALTER RUSSELL MEAD: Europe Puts Its Faith In Blanche DuBois. “Bank runs in Europe? The EU made them a little bit more likely this weekend, and as Cypriots stampede for the shrinking number of ATMs still handing out cash on the island, Italians, Greeks and Spaniards are also beginning to wonder if, with interest rates effectively at zero and confused politicians running Europe’s bank systems, the mattress might just be the safest place for their money after all.”
This haircut-to-depositors violates all the traditional thinking about avoiding bank runs.
UPDATE: Just the beginning?
Meanwhile, a reader emails: “This is pure speculation for the moment, but what would you want to bet that later analysis will show a rash of bank withdrawals by Cyprus-and-EU government affiliates and their families before the announcement of the tax on deposits?”
MORE: Here’s the soundtrack.