No Eurozone country, since the creation of the Euro, has ever instituted capital controls. It’s not really allowed, except in exceptional circumstances. Which goes to show the value of rules with exceptions for “exceptional circumstances”. Which is to say, not much.
The cost to large depositors
Deposits above 100,000 euros have been frozen at both banks. They could be wiped out entirely at Popular. At Bank of Cyprus, about 40% will be converted into equity.
So that is an absolute bank failure, no two ways about it.
The capital controls
depositors would be able to withdraw no more than €300 in cash each day, said people familiar with the move. Transfers over €5,000 would require permission of the central bank.
Overseas credit card transactions would be limited to €5,000 per month, but unrestricted in Cyprus. And there would be a ban on people taking more than €3,000 of bank notes out of the country per trip.
These rules will expire in 7 days. Oh, unless they’re renewed. Prediction – they will be renewed.