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A man walks past a branch of Bank of Cyprus in Nicosia March 31, 2013. Major depositors in Cyprus's biggest bank will lose around 60 percent of savings over 100,000 euros, its central bank confirmed on Saturday, sharpening the terms of a bailout that has shaken European banks but saved the island from bankruptcy.
A man walks past a branch of Bank of Cyprus in Nicosia March 31, 2013. Major depositors in Cyprus's biggest bank will lose around 60 percent of savings over 100,000 euros, its central bank confirmed on Saturday, sharpening the terms of a bailout that has shaken European banks but saved the island from bankruptcy.
(Yorgos Karahalis/Reuters)

BREAKINGVIEWS

What banking union? Cyprus reveals flaws in EU’s official plan

Reuters Breakingviews delivers agenda-setting financial insight. Its global correspondents react to stories as they develop, delivering sharp and provocative commentary on big financial news as it breaks.

The Cypriot catastrophe shows just how far away the euro zone is from creating its much-touted “banking union.” There was no euro zone supervision of Cyprus’ big banks, no transnational approach to put them into controlled bankruptcy, no common deposit insurance and no flow of bank rescue funds from abroad.