In the aftermath of this weekend's earth-shattering developments out of Cyprus, in which countless people lost billions in savings, having forgotten their money is nothing more (or less) than a general unsecured liability of an insolvent banking sector which in the absence of the Bernanke and Draghi moral hazard-put are simply easy confiscation targets, it is difficult to conceive that having a massive surplus of deposits was actually a good thing. Ironically, this was precisely the case as recently as 10 months ago, as this May 2012 presentation from the Bank of Cyprus titled "International Banking Services: Strategic Business Crossroad - A Reliable Financial Center" (don't laugh) makes all too clear.
Behold page 11 of 33 - the first page highlighting the strength of the banking sector in Cyprus:
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It is here that we read that the "Size and structure of the Cyprus financial system reflects Cyprus’ role as an international business centre" and that "This is reflected in the growing number of companies registered in Cyprus and the increasing size of the banking system" as measured by the record amount of banking deposits.
Ironically, these very deposits would not even a year later serve as the basis for the complete collapse of the same "strong" banking system, and lay the groundwork for the upcoming endless depression that the citizen of Cyprus will be subjected to for many, many years.
Because in the New Normal, what was recently a blessing, becomes a curse (literally, when one factors the earlier statements by the Church of Cyprus) in a few short months.
The full quite enjoyable "Cyprus - A Reliable Financial Center" presentation, which we urge everyone stuck in a cognitive bias box to read: