Is there some peculiar psychological thing about proximity plus the illusion of isolation that makes them turn themselves into havens for runaway banks? Inquiring minds want to know.
Anyway, Cyprus's story has obvious parallels with both Iceland's and Ireland's, with R.M.M.L. — Russian mobster money laundering — as an extra ingredient. All three island nations had a run of rapid growth as their status as banking havens left them with banking systems that were too big to save. Iceland, at peak, had banks with assets that equaled 980 percent of gross domestic product; Ireland was at 440 percent. Cyprus, at around 800 percent, was closer to Iceland in this respect.
