The issue is not so much the size of deposits – which are assets and also debts – but what the banks have done with them. They have been squandered by the banks, obviously, and this should always be the focus of the story.
With the Island’s GDP at $24 billion, there are almost 3 times as much in bank deposits as the entire economy is worth. They are going to have to address that fundamental problem if they expect to put their financial house in order.
via The PJ Tatler » Cyprus Depositor Haircut: 25% Off the Top for the Rich.