Cyprus Closes Banks Until Next Week as Fear of Runs Continue

Cyprus is reportedly keeping banks closed until next Tuesday in order to allow the government time to pass a bailout deal that will likely see money taken from the country’s ordinary depositors. The reason behind the closure is clear. If Cyprus’ banks were to open today they would be empty by tomorrow, as most would rather avoid a once-off tax on their savings. The problems for Cyprus are clear, but the ramifications on the rest of Europe remain less than obvious. Banks across Europe are still open, and there have not been instant ramifications, or banks runs, for financial institutions…