The “taxing” of high value deposits in Cyprus banks certainly is unnerving in a world of deficits and mega debts. For the two Cypriot banks in the most trouble, deposits over the â‚¬100,000 insured level will be reduced by 40%! This has got to cause any thinking person to ask, what the heck is going on? What were their banks doing? And who is minding the store?
As our own country continues to pile up debt at staggering proportions, the evident fiscal mismanagement parallels have to cause us to wonder when our “haircut” is coming. And this is why the Cyprus situation is so dangerous. We in the branding business know that perception is reality. As our population becomes less and less convinced that our leaders (Republican or Democrat) have the courage and wisdom to secure our financial future, that lack of confidence begins to shape reality and trust in our fundamental institutions. This deterioration of confidence can grow as a cancer with enormous implications for our future.
So the question is ““ how can the U.S. shore up its fiscal brand in this environment of uncertainty? You have any thoughts?