The Cypriot banking sector was more than four times the size of the country's economy at the end of 2011.
Some analysts say that the current crisis in the Cypriot banking sector was inevitable given the high assets-to-gross domestic product ratio of the sector. As illustrated by the chart, the country's assets-to-GDP ratio has nearly doubled in the past decade. As of 2011, it stood at 477%, well above the EU average of 350%.
As part of the country's €10bn bail-out deal, agreed on March 25, its banks will be forced to downsize their assets, leading to a reduction in this figure.
Cyprus is not the only country with a banking sector that weighs in much larger than its overall economy though. As Michael Marray discusses in his article Cyprus bail-in threatens to infect eurozone, there were numerous factors that led to the crisis in Cyprus and as The Banker editorial Germany must share Cyprus' pain argues, responsibility does not necessarily all lie with Cyprus.
