With the benefit of hindsight, we can assert that such a limit would not have prevented the kind of problems encountered by Cyprus. The truth lies in the fact that Cyprus was excessively exposed to Greece on the assets side and to Russia on the liabilities side.
The lesson that I draw from this is not that IFC’s as a class are bound to disappear or, at best, condemned to a slow death. I would rather argue that small country IFC’s need to exercise care in the conduct of their business, appropriately assess potential sources of risk and better manage their asset and liability mix.