US stocks have tumbled after a top European finance official suggested the Cyprus bailout framework could serve as a template for other European bank crises.
At the closing bell on Monday, the Dow Jones Industrial Average was down 64.28 points, or 0.44 per cent, to 14,447.75.
The broad-based S&P 500, which had been within striking distance of an all-time high, dropped 5.20 points, or 0.33 per cent, to 1,551.69.
The tech-rich Nasdaq Composite Index finished 9.70 points, or 0.30 per cent, lower at 3,235.30.
Stocks opened the day higher after the Cyprus bailout plan was sealed in an 11th hour deal.
“It’s good news that disaster was avoided. But the bad news is that there’s a cost to it,” said Art Hogan of Lazard Capital Markets.
But by midday, markets tumbled following published comments by Jeroen Dijsselbloem, who heads the Eurogroup of eurozone finance ministers.
Dijsselbloem told the Financial Times the costs of bank recapitalisations shouldn’t fall on the public sector, but on bondholders, shareholders and, if necessary, uninsured deposit holders.
Markets across Europe and in the US fell after the remarks, which were taken to suggest a new template for banking crises in other European countries.
However, Dijsselbloem subsequently released a statement via Twitter that characterised Cyprus as a “specific” case.