One of the key examples of the use of bail-ins was in Cyprus, a country saddled with high debt and the potential for bank failures. The country's banking industry grew at an alarming rate after Cyprus joined the European Union (EU) and the Eurozone. This growth, coupled with risky investments in the Greek market and risky loans from two large domestic lenders, led to the need for government intervention in 2013.

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A bailout wasn't possible, as the federal government didn't have access to global financial markets or loans. Instead, it instituted the bail-in policy, forcing depositors with more than 100,000 euros to write off a portion of their holdings—a levy of 47.5%.

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