Under the terms of the bailout, the second largest lender, Cyprus Popular Bank, is to be shut down and its accounts of under 100,000 euros combined with those of the Bank of Cyprus. Accounts of more than 100,000 euros at both banks will be frozen, with depositors, many of them rich foreigners, likely to lose much of their investments.Accounts greater than 100,000 euros are looking at losses of 40%, which will be taken directly from accounts. A strange twist is how much Russian money is in Cyprus' banks. It's estimated that 31 billion euros, or a third to one-half of all deposits have Russian origin. Cyprus' banks are set to re-open tomorrow, and "run" is not a strong enough word to describe what's the banks are going to experience when they open their doors.
By protecting state-guaranteed deposits of up to 100,000 euros, the bailout reversed a previous deal struck on March 16 that would have imposed a levy on small depositors as well as big ones, which had infuriated Cypriots and was vetoed by parliament. Government officials have estimated big depositors could now face loses of around 40 percent.
Update: Cyprus plans to open its banks tomorrow, Thursday.
Update II: Apparently, there was no run on Cypriot banks