Banking is a subject I don't know much about. Trust is a subject I've studied. What we have on the table is an issue between trust in the Banks of Cyprus. Lately, the banks there have been closed due to the serious financial condition in this island country. At first there was to be a sur-tax on all accounts, then on all accounts greater than a specified amount. And so on as this has evolved. Currently, people cannot really access their money at all.
All this means is that in the blink of an eye, the confidence or trust in Cypriot banks has diminished to nothing. This implies that when the restrictions are eventually lifted, even with a tax imposed, the populace will have very little trust whatever in their banking system - and by extension their government. Cash will be the name of the game. Long term banking prospects will be drastically diminished. What we may be seeing in Cyprus is exactly what happened in the USA after the crash of 1929. A dissolution of trust in public institutions. In the USA, it would be a decade, and a major war, to bring the banks back to their prominence.
