The euro dived and shares suffered sharp losses after a controversial bailout package for Cyprus threatened to trigger fresh turmoil in the eurozone.
Eurozone finance ministers demanded on Sunday that Cypriots pay up to 10% of their bank deposits in exchange for a €10bn (£8.5bn) bailout, prompting panic across the island as people rushed to cash machines to withdraw their savings.
That caused traders to dump shares across Europe, on fears it sets a dangerous precedent that could trigger bank runs in other eurozone countries.
Mohamed El-Erian, the chief executive of Pimco, the world’s largest bond investor, said: "In Europe, [the Cyprus bailout] could well undermine the recent tranquil behaviour of depositors and creditors in other vulnerable
I am thinking a lot of people will be pulling their money out of banks now that the government now wants to confiscate part of it. Along with that will be those who will hide future earning.
In the U.S. there have been ideas floated about taking 401ks and similar efforts to remove citizen’s money.