The financial news is awash with news of Cyprus and the 'levy' on bank deposits agreed as part of the EU bail out package.
Looking behind the official statements, it looks like this deal was more about pinching Russian assets (their large deposits with Cyprus) when the opportunity arose, rather than a shift in EU policy. But it was amazing nonetheless that they would cross the 'no go zone' of sacrificing depositors. Banking is a fragile system that needs all the confidence the bureaucrats can give it.
Whilst simplistically it could be argued that the package is only a worry for those countries with over-sized banking systems heavily reliant on large foreign deposits (especially if they're outside the EU), the potential issue is that depositors in other countries might decide prudence is the order of the day.
The ugly scenario is full scale bank runs across weaker countries. Let's hope this doesn't happen.
But the more plausible scenario is that many people take a little bit of money off the table, just in case. A mini-resurgence in holding cash, for instance, could have a meaningful impact on deposits - which then need to be replaced with funding from wholesale markets (or the ECB). The central bankers might want lower interest rates but their Cyprus initiatives could push them higher, with the effect a long term drag, rather than being outright catastrophe.
Whilst Cyprus is the centre of attention, another policy that could backfire on Europe is the flirtation with transaction taxes (or Tobin Taxes).
According to reports Italy's new Tobin Tax has already seen a drop in share trading volumes. It could be the election result, but common sense says that if you tax something like share trading, people will find another way, or stop, depending on what they're up to.
This is all well and good if you're trying to stop a particular activity, but not so good if you hope to raise revenue from it. Brazil introduced a Tobin Tax to try to slow down capital flows but Europe apparently wants Tobin Taxes to help make the banks - at least those who don't have Russian money to pinch - pay for their taxpayer support.
Places like London (which won't have one) will be licking their lips at the opportunity to earn extra revenue from shift in business activity out of Italy and other parts of Europe. After all, London's got a few holes of its own to fill.
The bankers will almost certainly already have a bunch of ideas for trading European equities without triggering the tax. Even the high frequency traders will have worked out ways around it, or ways to use their speed advantage to benefit from it.
That's the thing about equities. They can be traded anywhere, any time, any way. It's not like whacking a transaction tax on property, which is pretty much stuck where it is. With property, transactions that can't bear the cost of the stamp duty simply don't happen, they don't go elsewhere.
Without wanting to sound like I've been taking finance lessons from Adam Bandt, if the Europeans want their banks to pay for their taxpayer support they might be better off charging them for that, not imposing a puny tax which is almost voluntary.
Of course, what's bad news for Europe can be good news elsewhere. The Cyprus initiative has just created a demand for Euro denominated 'ECB proof' deposits and the Tobin Taxes create a need for 'Tobin proof' share trading.
UK banks and others will be licking their lips at the chance to step up and access a whole new pool of deposit money (possibly at lower rates?) and generate share trading revenue previously unavailable to them. Other countries with tax haven status and beachside resorts will benefit from the flow of Russian funds out of Cyprus.
And, of course, if you've had your eye on a European stock, fund or property, the bureaucrats have just made it a little cheaper.