(From Article)
Banks are having an especially tough time with Cyprus' bailout. Bank of America (NYSE: BAC ) has fallen 1.4% today, and JPMorgan (NYSE: JPM ) is down 0.7%.
The major hit big depositors took in Cyprus could lead to falling deposits in European banks, especially after Dutch Finance Minister Jeroen Dijsselbloem said this may be the new bailout template for Europe.
If it is, Europeans could rush to banks to pull money out, and we all know how harmful bank runs are to the industry.
Bank of America and JPMorgan are so intertwined with global banks that the increased risk in Europe is a negative for both companies.
Unless Spain, Italy, or Portugal ends up in the same boat as Cyprus, these banks aren't in any serious trouble, and there's a strong possibility that Cyprus was a big enough warning sign to make other countries get their fiscal houses in order.
What is Cyprus Bailout??
What they did was close the two largest banks, split each on into two banks, all the under $100K (euro) insured depositors in one bank, all the over $100K (euro) uninsured depositors in the other. They plan on taking as much as 40% of the 200K (euro) or larger accounts, which includes almost all of the Russian depositors, including Putin.
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