Grand Theft Auto – UK and EU Bank Depositor Bail-In Regime Implemented
Shares and stocks are tumbling around the world, with investors worried that the next global crisis has already begun. There is considerable uncertainty and nervousnessamongst economists and trend forecasters. Government’s sooth jittery
markets with misinformation in the hope that confidence does not
evaporate and their legitimacy with it.
If another crisis gets underway – do you think that the money you
have earned, paid tax on and put in a bank for a rainy day or for
an unexpected bill is safe? Because if you do, you’re wrong.
Automated grand theft on an unprecedented scale has been agreed with
unelected EU officials, the Bank of England and US authorities.
In a Joint paper issued
by the US Federal Deposit Scheme and the Bank of England dated 10th
December 2012 a statement included the words; “deposit schemes may have
to contribute to the recapitalisation of a failed bank”.
“The U.K. has also given consideration to the recapitalization
process in a scenario in which Systemically Important Financial
Institution (SIFI) liabilities do not include much debt issuance at the
holding company or parent bank level but instead comprise insured retail
deposits held in the operating subsidiaries. Under such a scenario,
deposit guarantee schemes may be required to contribute to the
recapitalization of the firm“.
This 2012 paper puts in place procedures in the event of the failure
of a systemically important bank. It clearly states that depositors are
to be protected – that is, until options have ceased to exist. Next
time, the state will be last in line, not first. Depositor bail-in
schemes are now a reality.
process in a scenario in which Systemically Important Financial
Institution (SIFI) liabilities do not include much debt issuance at the
holding company or parent bank level but instead comprise insured retail
deposits held in the operating subsidiaries. Under such a scenario,
deposit guarantee schemes may be required to contribute to the
recapitalization of the firm“.
This 2012 paper puts in place procedures in the event of the failure
of a systemically important bank. It clearly states that depositors are
to be protected – that is, until options have ceased to exist. Next
time, the state will be last in line, not first. Depositor bail-in
schemes are now a reality.
The issue at hand is the scale of the bank failure. US and UK
authorities have now admitted that all deposits are subject to potential
‘haircuts’ involving any major bank failure. This is an admission by
the British government that the £85,000 deposit guarantee scheme is
flawed and that the British depositors protection promise is simply a
sound bite and not financially supported.
