Great Graphic: Selected Bank Cap Structures

This Great Graphic was created by Lombard Street Research.   It shows the capital structure of Bank of Cyprus compared with the two largest Italian and Spanish banks.  It notes that the Bank of Cyprus, which is ironically to become the good bank though the IMF had wanted it to be restructured as well, was funded 77% by deposits, 13% by wholesale, 3% by debt and 6% by equity. 

Spanish and Italian banks secure their capital differently.  Funding is more balanced between deposits and debt.   This creates the wherewithal in a insolvency situation to convert the subordinated debt into equity.  Senior debt could also be converted if required.  This means that a resort to depositors is not needed and with the bulk of depositors domestic, there would be no political incentive to do so.