BS Alert! Why Cyprus (Probably) Can't Happen in the USSubmitted by Bob-45 on Thu, 03/28/2013 - 18:33
[The comments are both amusing and illuminating.]
Published: Thursday, 28 Mar 2013 | 1:57 PM ET
By: Jeff Cox
CNBC.com Senior Writer
One of the reasons the crisis in Cyprus has had limited market effects is that something like that would be unlikely to be repeated in the U.S.
That's not to say it could never happen. The truth is, there have been bank runs pretty much as long as there have been banks, so a liquidity crisis certainly could hit American financial institutions and cause substantial damage. But as a matter of scale, the problems in Cyprus are far worse than anything likely to wash up on U.S. shores.
"All things considered, it is extremely unlikely that depositors at U.S. banks would ever suffer losses in the event of a bank failure," said Paul Ashworth, chief U.S. economist at Capital Economics. "For a start, U.S. banks are better capitalized and the banking sector is a much smaller part of the overall economy."
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