Implode-o-Meter News - Europe's solution in German example : Andy Xie

When depositors want their savings in cash, banks cannot liquidate their assets to meet the withdrawals and must borrow from the ECB. If this process goes to the extreme, the ECB will be on the hook for all the liabilities of the banking systems, which means that the creditor countries in the north will become liable for all the bad loans in Spain's banking system. Knowing these consequences, Germany would stop the ECB from lending more, which forces Spain and other countries to shut their banks, preventing people from withdrawing money.
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The Spanish banking problem is now at center of the crisis. It dwarfs Greece's problems. Some euro zone countries are pushing for a European equivalent of America's Federal Deposit Insurance Corporation, which guarantees deposits in U.S. banks and manages bank bankruptcies. However, is likely too late for such a mechanism to deal with the situation.

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Europe's solution in German example : Andy Xie