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Unfortunately for the Cypriots, enough real money came in to finance some seriously bad investments, as their banks bought Greek debt and lent into a vast real estate bubble.
Money enters into the economy when it is lent into circulation by private banks.
Debt is the way that we create money; it is lent into existence.
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As Geithner said, you can't lend into a run.
"Some companies borrow from the state banks and then lend into the underground market.
"If we were able to lend into the economy, it could have a substantial impact".
Their original mission – of lending into the real economy – has been turned on its head.
The French bank said it continued lending into economies where it operated despite the difficult economic environment.
Lending into a commercial-property bubble was to blame for many of banks' bad loans in the early 1990s.
Another was to lend into the teeth of a panic — though only to solvent institutions and on sound collateral.
(In fairness, he has argued that the ultimate amount of money needed was almost irrelevant because the Fed would have been lending into a "run on the bank").
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CEO of Professional Science Editing for Scientists @ prosciediting.com