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Bloggers write articles every day. Some are specialists and write about only one subject on which they are experts. Others are generalists, and write in order to discuss, stimulate discussion, and get their ideas and opinions out to whomever might want to come and read and discuss the issues.

No one forces anyone to come here and read. Nor do I hold myself out as an expert on Cyprus or banking—anyone who reads my blog knows that. And I welcome anyone who comes here to discuss, and to offer his/her own specialized knowledge in that spirit rather than an abusive one.

I have done my homework and read tons of articles on the subject in order to learn about it. I am writing based on those articles, not based on some sort of all-knowing expertise, articles which have not mentioned the figures you cited. In addition, I have just quickly read the two articles to which you linked, and I don’t see the figures you cited in there, either. I see a generalized discussion of the limits and problems with the concept of deposit insurance, and that’s certainly relevant, but nothing that contradicts my assertion that the banks should have been allowed to go into bankruptcy and normal bankruptcy practices followed, instead of this special deal that focuses on depositors (and especially instead of the original deal that included small depositors with insured deposits).

Whether or not the deposit insurance system in Cyprus is viable is a different question. I am not conversant with how it works in Cyprus, but in the US monies are collected from banks based on their assets and not a tax on each depositor’s assets. The idea is that the entire banking system as a whole is not going to fail (I assume that would strain and overburden the system, obviously) but that certain banks will fail and the fund would cover it. I think people realize that in the event of a failure of the entire system their money would be at risk, but short of that they expect their deposits to be insured and covered, and at any rate they do not expect to be the special targets rather than the bondholders and shareholders.

This sort of approach is what I would advocate.

http://detlevschlichter.com/
see the latest 2 posts.
But really, if you haven’t seen any article with the figures that i gave, what business do you have writing a post like this?

“Secondly, I’m not talking about what the EU has decided to do or not to do.
[…]
Anf thirdly, […] I wrote a post about one particular proposal and one particular aspect of this Cyprus thing, and why I think it’s a bad idea.”

Uh?

First of all, you provide no citation for your assertions that the uninsured amounts were already lost and why, etc., and it’s certainly not something commonly discussed in articles on this subject, so if it’s the case it’s not something most people are aware of.

Secondly, I’m not talking about what the EU has decided to do or not to do. I’m talking about how this situation should work, or should have worked.

And thirdly—no, of course I did not write an original post that contained every concern you might have (didn’t spell out exactly how bankruptcy works, and who gets what in the event thereof). I wrote a post about one particular proposal and one particular aspect of this Cyprus thing, and why I think it’s a bad idea.

The present crisis is even more complicated, because there is this (Keynesian?) assumption that, if a Club Med country goes bankrupt, then it “must” leave the eurozone, and possibly the EU. (Some of us anti-Keynesians don’t think leaving the eurozone would be necessary, or even desirable, for a bankrupt country: on the contrary, the bailouts, not bankruptcy, make eurozone exit desirable for solvent, not insolvent, countries.)

Hence the bailouts are justified as a means to keep the EU together. A more likely reason for the bailouts is more trivial: Sarkozy threw a fit when Greece needed a bailout, and Merkel did not have the backbone to stand up to him.

BTW you did not mention stockholders & bondholders in the main post, which post starts off with the proposition that “the seizing of a certain percentage of the assets of depositors [with uninsured amounts in their accounts] has been decided on”.
Since all the uninsured amounts had been already lost, that proposition is obviously false: you cannot seize money that is not there. Not only false, it is pernicious, because it gives depositors a sense of entitlement to even more taxpayers’ money. (NB: of course the insured accounts _are_ entitled to _Cypriot_ taxpayers’ money.) Scoring points against the EU does not justify abandoning true conservative principles such as TANSTAAFL.
You, of course, did not know that you were repeating what can only be called a pernicious falsehood, but note that i said nothing against you: only against your post.

WRT stockholders+bondholders, you assume that something illegal has been done, without any evidence to back up your assumption.
In fact the evidence points in the other direction:
http://www.samizdata.net/2013/03/some-bondholders-are-more-equal-than-others/
(What do you think shares in Cypriot banks could be worth now, anyway?)

Even at this late hour, the press is still beating around the bush.

Even “informed” viewers haven’t figured out that there is no such thing as a single Euro.

The Cypriot Euro is the first out of the closet.

If all Euros are the same; pray tell why Cyprus doesn’t just print off a roll and staunch the bleeding?

The “such thing” I’m referring to was this quote from you, in which you say that I said something I never said [emphasis mine]:

“I would expect a true economic conservative to say that EU _taxpayers_ should not have given a single euro to Cypriot bank depositors. Instead, you (and many other purported “conservatives”) say that the EU should have given out even more _taxpayers_ money!
Truly this is the sort of blog post that makes me despair for America.

Not only did I never say any such thing, but in one of my later comments on this post I explicitly said that I am against the existence of the EU itself (here).

In the present post I am objecting to taking the money from people who put their money in Cypriot banks. I never said I’m for taxpayers paying instead. And I never said I’m against letting the banks go into bankruptcy and following normal procedures (if Cyprus banks are like ours, the creditors are paid in a certain order, but shareholders and bondholders should take the biggest hit, although uninsured depositors—over the deposit insurance limit—also take a hit, but less of a hit. Instead, the present plan puts the burden squarely on the latter and not the former.) Letting a bank fail and not having the taxpayers bail it out—especially when the problems are as widespread as in Cyprus—leads to other problems, to be sure (see this article, for example). But of all the alternatives it seems to present the fewest moral hazards. But if there were no EU, at least people in other countries wouldn’t be on the hook for what happens in another country.

In short, I am in favor of a solution more like Iceland’s. I may end up writing another post about this, but for now that’s the short answer.