Room for Debate: Should Depositors Save Cyprus's Banks?

When Europe Dithers

Edward Harrison, Credit Writedowns.com

Why have a deposit guarantee if government can expropriate your deposits? What happens in Cyprus could happen anywhere in the euro zone.

The Bail-In Is a Win-Win

Jacob F. Kirkegaard, Peterson Institute

Fears of contagious bank runs in other European countries are overblown. The fragmented euro zone banking system will prevent panic.

Don't Panic, Yet

Nicholas Spiro, sovereign risk analyst

Since the Cyprus decision, there has been only a muted effect on borrowing costs in Spain and Italy, which is the most reliable gauge of investor sentiment toward the euro zone.

A Dangerous Solution

Sergei Guriev, the New Economic School, Moscow

Only in the presence of the deposit insurance can depositors know there's no need to overtake each other in withdrawing their deposits.

Is Spain Next?

Charles Dumas, Lombard Street Research

In Cyprus, leave the small depositors alone and levy the wealthier accounts. In Spain, rising debt levels mean that a similar crisis might be unfolding.

Lots of Excuses, One Big Problem

Aristides N. Hatzis, University of Athens

After this decision, it is obvious that in the Eurozone anything can happen. That's not a good signal to the markets.