Wall Street is heavily invested in bank debt across the European Union. If banks begin falling as a result of the Cyprus 'bailout,' investors in the U.S. will feel the loss.
By Cyrus Sanati
FORTUNE -- The terms of the Cypriot "bailout" announced late Friday are simply atrocious and should be revised to protect small depositors to avoid potentially crippling bank runs from popping up across Europe. Forcing bank losses on account holders who believed their money was protected by government-backed deposit insurance violates one of the most sacred of trusts between a bank and its customers. As such, the agreement, if it stands, threatens to crash the entire Cypriot banking system, which could have dangerous effects for banks across the European Union, as well as for investors on Wall Street, who have bet billions of dollars backing EU banks and sovereign notes.
