The product of the banking system is based on trust.
Without trust, there is no banking. And trust in banking means a good relationship with depositors.
The old bankers claim “you don’t mess with the depositors”. Without his trust and his savings, there are no Banks, no funding and no growth.
Everything that happened in Cyprus shook that trust, causing waves of insecurity in Europe. Those who foolishly claimed that Cyprus was a unique case realized that they convinced nobody.
Depositors across Europe, Germany included, feel insecure after Cyprus and rationally think of when their time for a haircut will come.
That is why most of the Eurozone officials are trying to calm things down.
But, the glass has cracked and it will need time and effort to regain that lost trust.
From here on, unfortunately, every day will different to the last.
Now there is no other way other than coordinating everyone for growth.
Only the return to growth will allow trust to be regained.
TO VIMA
