My understanding is that banks in Cyprus are heavily invested in Greek bonds (makes sense given the shared language/culture/etc) and that the Greek bailout resulted in the bondholders taking a 50% "haircut" which set off the current banking crisis in Cyprus. And now the "solution" to the problem in Cyprus is likely to set off bank runs in other troubled Eurozone economies. One domino knocks over the next ...
Edit: half of this is in the article which I didn't read before commenting ;-)
