“From Citi‘s Steven Englander, some big-picture thoughts about what this crazy Cyprus weak meant.
Basically, the real fallout comes next time.
In any future crisis depositors have an incentive to shift their assets at an early stage of the crisis and any investor with exposure has an incentive to liquidate any exposure as soon as possible. This may speed up the time in which such crises occur and also force policymakers to make their move earlier in a crisis. The power of the state in being able to impose a levy literally overnight makes it harder for them to convince residents and investors that they won’t do so if push comes to shove….”Twitter