The politicians of the western world are coming after your bank accounts. Cyprus-style “bail-ins…for systemically important banks” are actually proposed on pages 144 and 145 of “Economic Action Plan 2013” in the new Canadian government budget and it is being reported that the European Parliament will soon be voting on a law which would require that large banks be “bailed in” when they fail…I can’t even begin to describe how serious all of this is. So exactly what in the world is going on here? Words: 1075
So writes Michael (http://theeconomiccollapseblog.com) in edited excerpts from his original post* entitled Cyprus-Style “Bail-Ins” Are Proposed In The New 2013 Canadian Government Budget!
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Michael goes on to say in further edited excerpts:
I can’t even begin to describe how serious all of this is. From now on, when major banks fail they are going to bail them out by grabbing the money that is in your bank accounts. This is going to absolutely shatter faith in the banking system and it is actually going to make it far more likely that we will see major bank failures all over the western world.
The Canadian government is actually proposing that what just happened in Cyprus should be used as a blueprint for future bank failures up in Canada. The following comes from pages 144 and 145 of “Economic Action Plan 2013” which you can find right here. Apparently the goal is to find a way to rescue “systemically important banks” without the use of taxpayer funds…
Canada’s large banks are a source of strength for the Canadian economy. Our large banks have become increasingly successful in international markets, creating jobs at home.
The Government also recognizes the need to manage the risks associated with systemically important banks — those banks whose distress or failure could cause a disruption to the financial system and, in turn, negative impacts on the economy. This requires strong prudential oversight and a robust set of options for resolving these institutions without the use of taxpayer funds, in the unlikely event that one becomes non-viable.
So if taxpayer funds will not be used to bail out the banks, how will it be done? Well, the Canadian government is actually proposing that a “bail-in” regime be implemented…
The Government proposes to implement a “bail-in” regime for systemically important banks. This regime will be designed to ensure that, in the unlikely event that a systemically important bank depletes its capital, the bank can be recapitalized and returned to viability through the very rapid conversion of certain bank liabilities into regulatory capital. This will reduce risks for taxpayers. The Government will consult stakeholders on how best to implement a bail-in regime in Canada. Implementation timelines will allow for a smooth transition for affected institutions, investors and other market participants.
So if the banks take extreme risks with their money and lose, “certain bank liabilities” (i.e. deposits) will rapidly be converted into “regulatory capital” and the banks will be saved.
In other words, the banks will just be allowed to grab money directly out of your bank accounts to recapitalize themselves.
That may sound completely and utterly insane to us, but this is how things will now be done all over the western world.
Sometimes a “bail-in” can be done by just converting unsecured debt into equity, but as we just saw in Cyprus, often when there is a major bank failure a lot more money is required to “fix the banks” than can possibly be raised by converting unsecured debt into equity. That is when it becomes very tempting to dip into uninsured back accounts.
In fact, some European politicians are openly admitting as much. According to RT, the European Parliament will soon be voting on a new law which will make Cyprus-style bank account confiscation a permanent part of the solution when major banks fail throughout the EU…
A senior lawmaker told Reuters the Cyprus model may not be an isolated case, and is perhaps a future template in dealing with troubled European banks.
The new template is now likely to turn into a full-scale EU law, letting taxpayers off the hook in case a bail-out is needed, but imposing major losses on bigger savers on a permanent basis.
“You need to be able to do the bail-in as well with deposits,” said Gunnar Hokmark, member of European Parliament, who is leading negotiations with EU countries to finalize a law for winding up problem banks, Reuters reported.
“Deposits below 100,000 euros are protected … deposits above 100,000 euros are not protected and shall be treated as part of the capital that can be bailed in,” Hokmark told Reuters, adding that he was confident a majority of his peers in the parliament backed the idea.
The European Commission has written the draft of the law, which now awaits approval from eurozone member states and the parliament on whether and when it can be implemented. It’s been reported, the law is planned to take effect in the beginning of 2015.
Are you starting to understand? The other day when I said that “The Global Elite Are Very Clearly Telling Us That They Plan To Raid Our Bank Accounts“, I was not exaggerating.
When the next great wave of the economic collapse strikes, capital controls and bank account confiscation will suddenly become “normal” all over the world so get prepared while you still can.
One thing that you can do is make sure that you don’t have all of your eggs in one basket. The following is what Jim Rogers recently told CNBC…
“I, for one, am making sure I don’t have too much money in any one specific bank account anywhere in the world, because now there is a precedent,” he said. “The IMF has said ‘sure, loot the bank accounts’ the EU has said ‘loot the bank accounts’ so you can be sure that other countries when problems come, are going to say, ‘well, it’s condoned by the EU, it’s condoned by the IMF, so let’s do it too.'”
The more places that you have your money, the more difficult it will be for “the powers that be” to loot it.
The global elite are fundamentally changing the game. From now on, no bank account on earth will ever be able to be considered “100% safe” again. This is going to create an atmosphere of fear and panic, and no financial system can operate normally when you destroy the confidence that people have in it.
Confidence is a funny thing – it can take decades to build, but it can be destroyed in a single moment. None of us will ever be able to have confidence in our bank accounts again, and I fear that the next wave of the economic collapse may be closer than I had first anticipated.
Editor’s Note: The author’s views and conclusions in the above article are unaltered and no personal comments have been included to maintain the integrity of the original post. Furthermore, the views, conclusions and any recommendations offered in this article are not to be construed as an endorsement of such by the editor.
Think what is happening in Cyprus can’t happen in the U.S? More than $10.8 trillion in deposits are insured by the FDIC with a $33 billion insurance fund. That’s pretty scary,” and the best way to protect yourself is to get into real assets.
Things will get messy and nasty, sooner rather than later. Protect yourself and your family by preparing for a complete and utter economic collapse that will also collapse governments and societies. Predatory government will be stealing assets from anyone who has them.
For those who haven’t yet grasped the uselessness of government policy, please read Charles Hugh Smith’s simple fourteen point explanation below. It details the steps government has taken, why they are failing, why the middle and poorer classes must get poorer and suggests that we are close to the end of the Ponzi scheme that has provided the myth that our economy has been strong for the last couple of decades.