Cyprus: what is a Depositor?

Debate is raging within the EU and the IMF as to the definition of "Depositor." The question came to the fore in connection with the attempted bank robbery in Cyprus.

For centuries a Depositor was understood to mean an owner of money on deposit (meaning safe keeping). Deposits below a certain limit were insured, so if the bank failed, the Depositor would have the money returned.

The EU and the IMF had attempted to redefine a "Depositor" as an "Investor" in the bank. Under this new definition if the bank encountered difficulties due to losses, the losses would be made whole from the deposits of Depositors being treated as Investors.

The new definition does away with the concept of insured deposits. Will this lead to bank runs? Too early to tell.