"An economic and political disgrace" is how City AM editor, Allister Heath, describes it.
I call it theft.
Capital controls, a euphemism for banning you from taking more than a sliver of your property out of a particular country.
They are motivated by concerns over the "public good", over "the long term stability of the economy", when in fact the mere fact of introducing them speaks volumes about the latter, and is contrary to the former.
It is the logical end point of the moral turpitude of statists, whose fundamental belief is that private property, really, doesn't exist, but is tolerated and can be confiscated, controlled and shared as long as it fits the big picture, the grand plan.
The plans of politicians who think they know best how to run your life.
Cyprus has no future as a financial hub. Confidence is utterly destroyed, as depositors, regardless of whether they individually will lose part of their savings as part of the bailout, will abandon its banks.
It's over. Runs on banks happen because people panic about their property and their savings. That money is their's, and they frequently worked hard and took time to make that money.
They rightfully seek to protect it, withdrawing it from institutions that might take it from them, because money is an extension of the self. It is the product of people's minds and labour, translated into a universal medium of exchange, and a means of storing that value.
Being able to take it out of a country is an extension of the right to leave, the right to take your life includes taking your possessions, includes your bank account.
Of course, banks are not foolproof. In a free market, people rightfully take a risk in deposits with banks, particularly given virtually all banks engage in fractional reserve banking, lending much more than they take in deposits. If a bank fails, then depositors should become unsecured creditors effectively being a segment of the new shareholders of the bank.
However, it is quite another thing for a sovereign state to do this, to restrict ALL capital flows out of a country.
You see the primary reason why a government does that is because it knows it has lost the confidence of its people, because it is about to steal from them in one way or another (in this case not through devaluation/QE of the kind propounded by Paul Krugman, Russel Norman and Robert Mugabe).
It is a sign of failure, the tool of the statist and the act of a scoundrel.