Seemed that way to me as well.

I don't give a fuck what the banker's religion is when he is using his political ties to offload bad loans or get government to bail his ass out of bad investments. He is just another thief using the public's taxes to enrich himself...whether he is a Jew, a Catholic, Italian, French, or a left handed tranny taoist makes no difference.

The bankers are not to blame.  Government incentives banks to do this shit to put momentum into stalled economies and they never get caught up.  The Governments provide "backing" guarantees and "bail outs".

It is bad business practice to over leverage yourself.  It is the Government involvement in our economy and banking finance indusrty that causes this shit.  There are plenty of people looking to make a buck out there, but would not be so foolish to do it unless the Gov had your back.

If the business incentives were forcing a bad deal why didn't the bankers get their friends/cronies in the government to back off?

They're not funding government with it, not in the sense you're probably thinking.

The banks in Cyprus are, like many banks both here and in the EU - insolvent.   Kaput.   Done.   There is some pretty elaborate sleight of hand to make it look like they're not, but honestly the only thing keeping them from failing immediately is that people assume they're solvent.  

Basically, people know the money isn't there on the balance sheets but they're simply pretending it is.   The typical man on the street is mostly unaware of this.

Now, the banks in Cyprus are worse off than most in the EU; it got bad enough that the ECB told them that unless they accept a bailout, the ECB will not keep providing them with liquidity (lending them money on and off to cover various bank related day to day crap).   It's sort of like an intervention.   However, to set the banks right they need to dump in several billions of euros to fill the balance sheet holes.   Nobody is willing to pony up the cash and Germany, etc. are sort of pissed at this point, so they're taking several billion euros of customer deposits to provide some of that money.

Compared to the overall EU expenditures, the money is a drop in the bucket.  It's not being taken and spent anywhere- it's simply being poured down a hole to fill in accounting fuckups, the idea being they need to pretend they're on the up and up.  The various tin-pot governments they let into the EU are pissing away money they don't have left and right, and cheating the system and hurting the other members in the process.  EU can't let it go on.   Problem is, now they're going to create a bank run.   They fucked up big time.

Many bankers are every bit as much to blame as the governments on this one - they're often the same people, revolving-door style.

Contrast this whole mess to the US, where they simply print whatever they want in whatever amount they want, and pretend a reckoning will never come (or that if it does, they'll be out on their yacht not giving a fuck).

Even if less than than 1% of deposits are available for immediate withdrawal, more could be raised in time. If I'm a bank and I loaned you money but all of a sudden need it back, I can sell the loan to someone else and get money now. Of course, if you're not likely to pay the loan back, I wouldn't be able to sell it for the full amount.

I think that is the problem, most of the loans and "assets" are bad paper. Nobody wants them, that is why the banks are insolvent. If they could sell assets they would not be insolvent.

Just like here, "deposits" have been loaned out and are bad loans. There is no value to them. That money essentially does not exist.

The reserves are in ledgers in a computer and reserves themselves are borrowed by the bank.

Except for the small amount of actual cash in the banks, the majority of the value of a bank is in bad paper that is now worthless and nobody will buy it.

In the US the fed reserve is buying $85 billion dollars of bad real estate paper and bad derivitives from US banks every month in an attempt to keep banks solvent.

You don't understand the monetary system then. A piece of "linen" is worth that much (bills are a cotton/linen blend) because everyone collectively gives it that value. Sure we can upset the apple cart and say "worthless to me." You can trade in hard goods. The system is still "set" by the current working government so there's always the tax man to deal with or dodge as it may seem to be.

In any case, the rest of America barters debt with the dollar bill. You're trading debts - that's the bottom line. What is the debt being traded? The most costly of commodities - time. Time bought via someone's labor. Pretty scarce.