Still, Luxembourg's banking sector consists largely of subsidiaries and branches of foreign banks, so that significant support might be expected from mother banks and, ultimately, the governments of those mother banks, in the event of a crisis.

WSJ: Luxembourg, Malta Stress Distance from Cyprus

Partly as a result of the Iceland fiasco, the British government has written to the European Commission seeking urgent consideration of improvements to legislation of cross-border banking in the EEA, including better ways of protecting depositors in branches of foreign banks.

ECONOMIST: Iceland

Participation in the DPS is compulsory for all banks authorised by the Central Bank of Cyprus, i.e. banks incorporated in the Republic of Cyprus, including their branches in other countries, and the Cyprus branches of foreign banks, incorporated outside the Republic of Cyprus or the Member-States of the European Union.

FORBES: The Cyprus Bank Bailout Could Be A Disastrous Precedent: They're Reneging On Government Deposit Insurance

The Financial Services Authority (FSA), Britain's financial regulator, has also been busy, issuing new proposals on the management of liquidity by banks (including branches of foreign institutions) in its domain.

ECONOMIST: Globalisation under strain: Homeward bound | The

In November 2008 the RBI had to lend foreign currencies to Indian banks to help them meet the obligations of their foreign branches.

ECONOMIST: India is caught in two minds about financial globalisation

The U.K. has been a prime target of these warnings, after regulators pressured foreign-owned banks to convert their branches in the U.K., which are regulated by the government where the bank is based, into subsidiaries, which are regulated by the U.K. and have their own capital and liquidity.

WSJ: Cyprus Rescue Hurts Bloc's Bank Plan