It was just a few short days ago, on Wednesday of last week, that Ukraine's largest lender, PrivatBank, said that reports it will be nationalized were "attempts to create panic and destabilize the political situation in the country."

Local media, quoted by Reuters, speculated that Privatbank, which is part-owned by one of Ukraine's richest men, billionaire Ihor Kolomoisky, could be privatized if it does not meet a year-end deadline for Ukraine banks to reach a capital ratio requirement agreed under an International Monetary Fund bailout program. However, what made Privatbank unique, is that with some $6 billion in private deposits - or 36.5% of Ukrainian banks' total - it puts America's own TBTF banks to shame: the bank is an absolute giant which controls nearly half of the local banking sector.

On Wednesady, the bank's deputy chairman reaffirmed that there was nothing to worry about and said its customers had received phone calls and messages telling them the bank would be taken under state control due to a failure to meet the required capitalization level. "Exploiting the ignorance of citizens about nationalization, they stir up panic," Oleg Gorokhovsky said, without saying who was behind the reports.

Separately, the bank stated that "the information attack on Ukraine's largest bank, Privatbank linked to the 'pseudo-nationalisation' of the bank is primarily directed at clients of the bank and is an attempt to destabilize the political situation in the country." It added that the reports of its imminent nationalization were politically motivated.

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Fast forward four days, when late on Sunday night, the "attempts to create panic and destabilize the political situation" in Ukraine turned out to be true after all, and whether politically motivated or otherwise, the Ukrainian government announced hours ago that it would nationalize the suddenly very ironically named PrivatBank, unleashing one of the biggest shake-ups of the banking system since the country plunged into political and economic turmoil two years ago.

In a statement late on Sunday, the government made no mention of the size of the potential burden to the state budget, but said it would ensure a stable transition and the smooth functioning of the bank.

According to Reuters, The Finance Ministry would take over PrivatBank, with Finance Minister Oleksandr Danylyuk adding that depositors' money was safe and secured by the state, and that the bank was functioning normally. It was not immediately clear if Ukraine had $6 billion in liquid funds to distribute to PrivatBank depositors should there be a run on the bank tomorrow, as some expect.

"The private shareholders of PrivatBank proposed to the government that it become the bank's owner in the interests of its clients," the government said in a statement.

"The transition period begins on 19 December. The state will ensure a smooth transition and the stable functioning of the bank."

The unprecedented bailout could fuel instability in Ukraine, where opposition parties have repeatedly called for snap elections to unseat the pro-Western leadership that took power after the 2014 Maidan protests. As Reuters notes, the opposition has harnessed the anger of depositors from banks that were previously shut down in a sweeping cleanup of the financial system, mobilizing rallies and demanding the central bank chief's resignation.

The nationalization announcement came just days before parliament was to vote on next year's budget, which must stick to a shortfall of 3 percent of economic output, as agreed with Ukraine's international backers.

There was no official statement from PrivatBank. Oleg Gorokhovsky, PrivatBank's deputy chairman, wrote on Facebook that the bank had seen increased withdrawals in recent days of 2 billion hryvnia ($76 million) daily against previous peaks of around 1.5 billion hryvnia ($57 million). "Of course, the bank needed a capital increase and to improve the collateral for loans," he said.

The plan was to do this over a period to 2018. However, Gorokhovsky said after the outbreak of violence in the east and against the backdrop of a sinking economy, the bank experienced what he described as a series of "information attacks" that led to an outflow of funds from individuals and corporate clients.

"The decision on a voluntary and peaceful transfer of the bank to state ownership was made at a time when we realized that we could not survive the (latest) information attack," he wrote.

In other words, while the real reason for the nationalization, it appears the owners were eager to dump what remains of the bank into the lap of Ukraine's taxpayers, most of whom also happen to be the bank's depositors.

Incidentally, recapitalizing PrivatBank and other large lenders and reducing their lending to shareholders was one of the tasks mandated by a $17.5 billion IMF aid-for-reforms program.

Meanwhile, the political future of former PrivatBank owner, Kolomoisky, remains unclear: his control of strategic industries, including energy and media holdings, has put him at the center of ongoing power battles among the political elite since street protests ousted Moscow-backed Viktor Yanukovich and the pro-Russian rebellion erupted in the east.

PrivatBank's nationalization is the culmination of the banking sector cleanup, which has closed dozens of lenders that were seen as little more than personal piggy banks for their owners. Should there be a major run on the bank in the coming days, Ukraine may once again emerge as a centra of financial and economic instability in the region, despite the IMF's implicit backing