After news crews outnumbered customers in some ATM lines last week when banks in Cyprus opened back up following a bailout deal with European Union officials, the mainstream financial media appears to have quickly lost interest in this story.

They shouldn’t.

This continues to be one of the more important developments in the long-running global financial crisis and it’s likely to spur a good deal of new interest in gold. Not immediately, but, over time, there is sure to be a “slow motion bank run” by wealthy investors in many parts of the world and some portion of that money will be used to buy gold.

It’s no surprise that there was little commotion when banks in Cyprus reopened last Thursday. Why? Because insured accounts (less than 100,000 euros) were left untouched in the bailout deal and capital controls limited cash withdrawals to 300 euros for individuals and to 5,000 euros for businesses. Large accounts, where up to 60 percent of deposits could be seized, were frozen.

In order to have a run on any bank, depositors must be able to withdraw their money – all of it if they desire – and that simply hasn’t been possible in recent days.

Word came on Monday that 37.5 percent of deposits exceeding 100,000 euros have already been seized to recapitalize the Bank of Cyprus, the nation’s biggest lender, with another 22.5 percent to remain blocked until the recapitalization plan is finalized. The 40 percent of large accounts that is left over could be unfrozen as soon as today, but even this won’t result in a bank run due to capital controls.

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