Investors fear that the plan to impose losses on bondholders and some depositors could be repeated in other countries, dispelling the notion that the approach in Cyprus was a one-off solution, and raising concerns over a loss of confidence in deposits held by banks in Europe's peripheral countries.

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Some 18 per cent of the deposits held in Cypriot banks by residents of other eurozone countries were pulled out in February, according to figures from the Central Bank of Cyprus.

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Some 18 per cent of the deposits held in Cypriot banks by residents of other eurozone countries were pulled out in February, according to figures published on Thursday by the Central Bank of Cyprus.

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These bonds were offered by the Russian government as compensation for those unwise enough to have held hard-currency deposits in Soviet banks.

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Despite the fact that foreign dollar deposits are already held at correspondent money center banks in New York, the centralized and unfettered enforcement access to customer data becomes the single greatest aspect of this new deal.

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About a third of all deposits in Cypriot banks are believed to be held by Russians.

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They suspected that half of the deposits in the island's banks were held by Russians with much of the money being laundered.

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Not only that, but it was unclear what exactly the target should be, since money could be defined in different ways: narrowly, as cash and demand deposits held with commercial banks, or broadly, including savings deposits with other financial institutions.

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