The big banks in the eurozone started pulling money out of Cyprus’ banks a year before the ultimatum. They made sure they got paid. Then the European Central Bank announced the ultimatum.
At first, all depositors were to take the loss, but the parliament refused. So, they got the big depositors. These were private depositors. They were not German banks.
The big banks knew Cyprus was doomed. The dumb Cyprus bankers were loaded up with Greek government debt.
The German bankers’ money was tied up in longer-term deposits. They could not get out. So, they waited. They slowly cashed in their holdings. They took back euros. Then, when they were safely out, the “EuroGroup” pulled the plug.
The eurozone deposits were reduced by 50% before this happened.
When “hot money” flows out, the regular depositors are on the hook. They don’t figure it out. They don’t see cause (Greek default) and effect (busted Cyprus banks). They believe the local bankers. “No problem.” Then, one fine day, their accounts are frozen. The haircut is applied.
The sheep are there to be sheared. They bleat a little, and then it’s all over. Until the next nation of sheep are ready for shearing.
One by one, the sheep get sheared.