Perhaps the Dumbest Statement Ever

Here is how the UK Telegraph reports on the latest statement from the European Union:

The euro fell on global markets after Jeroen Dijsselbloem, the Dutch chairman of the eurozone, announced that the heavy losses inflicted on depositors in Cyprus would be the template for future banking crises across Europe.

"If there is a risk in a bank, our first question should be 'Okay, what are you in the bank going to do about that? What can you do to recapitalise yourself?'," he said.

"If the bank can't do it, then we'll talk to the shareholders and the bondholders, we'll ask them to contribute in recapitalising the bank, and if necessary the uninsured deposit holders."

Ditching a three-year-old policy of protecting senior bondholders and large depositors, over €100,000, in banks, Mr Dijsselbloem argued that the lack of market contagion surrounding Cyprus showed that private investors could now be hit to pay for bad banking debts.

So let's translate this statement into clear English.  What it means is this:  if you have more than the insured level of deposits in a bank, you had better remove them.  Otherwise, if the bank gets in trouble, the government will just take your money to bail it out.  For most individuals, this will not mean much, but for companies that have large balances in their business accounts during certain times of their payments cycle, the new policy means a completely new risk that must be confronted.  One thing is certain, over time the new policy will reduce the amount of money kept in possibly troubled banks.  That effect will, in turn, further weaken those banks.  The end result of the policy will be to hasten the failure of the banks.  Indeed, some banks may fail that would otherwise have survived.

This is the dumbest statement ever.