The two main banks in this crisis — Bank of Cyprus and Cyprus Popular Bank — have branches in other countries. And those foreign branches were not shut down this past week. Customers — like Russian gazillionaires — weren’t limited to withdrawing $130 a day. They took millions out, while ordinary Cypriots were frozen.
The Great Depression children in the US seem(ed) always to be careful not to have more deposited than is insured under the FDIC.
Also, Cyprus couldn’t print its own euros to bail itself out, inflation or not. The Cyprus problem is not simply the US problem writ small.
Macroeconomically, they are a very small apple to the USA’s huge warehouse of oranges, not that small US depositors/investors should be ignoring the situation.