The bail-in is nothing more than a bank robbery in reverse. Bonnie and
Clyde are now on the board of directors.
Don Hank
BAIL INS' COMING
Experts
say institutions will grab deposits without warning
Read more at http://mobile.wnd.com/2013/09/americans-warned-bank-bail-ins-coming/#KMcasAK4q0kmW5fu.99
WASHINGTON
- With the United States facing a $17 trillion debt and an acidic debate in
Washington over raising that debt limit on top of a potential government
shutdown, Congress could mimic recent European action to let banks initiate a
"bail-in" to blunt future failures, experts say.
Previously
the federal government has taken taxes from consumers, or borrowed the money, to
hand out to troubled banks. This could be a little different, and could allow
banks to reach directly into consumers' bank accounts for their
cash.
Authority
to allow bank "bail-ins" would be in lieu of approving any future taxpayer
bailouts of banks that would be in dire need of recapitalization in order to
survive.
Some
financial experts contend that banks already have the legal authority to
confiscate depositors' money without warning, and at their
discretion.
Financial
analyst Jim Sinclair warned that the U.S. banks most likely to be "bailed-in" by
their depositors are those institutions that received government bail-out funds
in 2008-2009.
Such
a "bail-in" means all savings of individuals over the insured amount would be
confiscated to offset such a failure.
"Bail-ins
are coming to North America without any doubt, and will be remembered as the
'Great Leveling,' of the 'great Flushing' (of Lehman Brothers)," Sinclair said.
"Not only can it happen here, but it will happen here.
"It
stands on legal grounds by legal precedent both in the U.S., Canada and the
U.K."
Sinclair
is chairman and chief executive officer of Tanzania Royalty Exploration Corp.
and is the son of Bertram Seligman, whose family started Goldman Sachs, Solomon
Brothers, Lehman Brothers, Bache Group and other major investment banking
firms.
Some
of the major banks which received federal bailout money included Bank of
America, Citigroup and JPMorgan Chase.
"When
major banks fail, they are going to bail them out by grabbing the money that is
in your bank accounts," according to financial expert Michael Snyder. "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."
Given
the dire financial straits the U.S. finds itself in, these financial experts say
that Congress could look at the example of the European Parliament, which
recently started to consider action that would allow banks to confiscate
depositors' holdings above 100,000 euros. Generally, funds up to that level are
insured.
Finance
ministers of the 27-member European Union in June had approved forcing
bondholders, shareholders and large depositors with more than 100,000 euros in
their accounts to make the financial sacrifice before turning to the government
for help with taxpayer funds.
Depositors
with less than 100,000 euros would be protected. Considering protection of small
depositors a top priority, the E.U. ministers took pride in saying that their
action would shield them.
"The
E.U. has made a big step towards putting in place the most comprehensive
framework for dealing with bank crises in the world," said Michel Barnier, E.U. commissioner for internal market and
services.
The
plan as approved outlines a hierarchy of rescuing struggling banks. The first
will be bondholders, followed by shareholders and then large
depositors.
Among
large depositors, there is a hierarchy of whose money would be selected first,
with small and medium-sized businesses being protected like small
depositors.
"This
agreement will effectively move us from ad hoc 'bail-outs' to structured and
clearly defined 'bail-ins,'" said Michael Noonan, Ireland's finance
minister.
The
European Parliament is expected to finalize the plan by the end of the
year.
The
purpose of this "bail-in," patterned after the Cyprus model, is to offset the
need for continued taxpayer bailouts that have come under increasing criticism
of the more economically well-off countries such as
Germany.
Last
March, Cyprus had agreed to tap large depositors at its two leading banks for
some 10 billion euros in an effort to obtain another 10 billion European Union
bailout.
While
this action prevented the collapse of Cyprus' two top banks, the Bank of Cyprus
and Popular Bank of Cyprus, it greatly upset depositors with savings more than
100,000 euros.
WND recently
revealed that the practice of "bail-ins" by Cyprus a year ago was
beginning to spread to other nations as large depositors began to see their
balances plunge literally overnight.
A
"bail-in," as opposed to a bailout that countries especially in Europe have been
seeking from the International Monetary Fund and the European Union, is a
recognition that such outside monetary injections won't be
forthcoming.
Sinclair
said that the recent confiscation of customer deposits in Cyprus was not a
"one-off, desperate idea of a few Eurozone 'troika' officials scrambling to
salvage their balance sheets."
"A
joint paper by the U.S. federal Deposit Insurance Corporation (FDIC) and the
Bank of England (BOE) dated December 10, 2012 shows, that these plans have been
long in the making, that they originated with the G20 Financial Stability Board
in Basel, Switzerland, and that the result will be to deliver clear title to the
banks of depositor funds," Sinclair said.
He
pointed that while few depositors are aware, banks legally own the depositors'
funds as soon as they are put in the bank.
"Our
money becomes the bank's, and we become unsecured creditors holding IOUs or
promises to pay," Sinclair said.
"But
until now, the bank has been obligated to pay the money back on demand in the
form of cash," he said. "Under the FDIC-BOE plan, our IOUs will be converted
into 'bank equity.' The bank will get the money and we will get stock in the
bank."
"With
any luck," Sinclair said, "we may be able to sell the stock to someone else, but
when and at what price? Most people keep a deposit account so they can have
ready cash to pay the bills."
Such
plans already are being used, or under consideration, in New Zealand, Poland,
Canada and several other countries.
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