Bank Run Fears: Customers Being Forced to Provide Evidence For Why They Need Cash

In early 2013 the country of Cyprus locked down private banking accounts and restricted access to depositor funds. It was the first widely documented instance of a “bail-in,” as bank officials and European regulators determined that bad loans taken on by the banks were now the responsibility of the banks’ customers. This led to a country-wide confiscation of 10% or more of all customer funds. In the heat of the Cyprian financial panic banks limited cash withdrawals to around $300 and ramped up security to prevent angry Cypriots from breaking down the doors. What happened in Cyprus was big news all over the world, but within a few news cycles, once European and American officials assured the people it was a limited-scope event, the general population swept potential fears under the rug.



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