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Bank Deposits Can Be Used To Bail Out Canadian Banks! Yes, ’It Can Happen Here’.

Printable version / Version imprimable

(CRC)—When the president of the so-called Eurogroup, the Netherlands Finance Minister Jeroen Dijsselbloem let the cat out of the bag in terms of bankers future plans following the theft of Cypriots bank deposits, all hell broke loose in Europe as the financial press headlined that the seizing of bank deposits of Cypriots would become a “template for other European Union countries”.

What Dijsselbloem had said in that recent Reuters interview was not an opinion, a mistake or a misquote. All bank deposits worldwide, not just in Europe, are now at risk as per the policy directives issued by the Basel-based Financial Stability Board (FSB) to the G20 countries in October 2011.The 45 pages FSB guidelines entitled “ Key Attributes of Effective Resolution Regimes for Financial Institutions dealt with the risks associated with "systemically important financial institutions" (SIFI). A more recent, December 10, 2012, joint paper by the US Federal Deposit Insurance Corporation (FDIC) and the Bank of England (BOE) called “ Resolving Globally Active, Systemically Important, Financial Institutions ” goes back to the period of the passage of the Dodd-Frank Act in June 2010. "The Dodd-Frank Title II, Orderly Liquidation Authority, and those who voted for it were voting to trash the principles of Glass-Steagall organization and regulation of commercial banking."

Is it any surprise that Canada has already put into law the FSB directive? Not if you consider that Mark Carney, who was appointed November 4, 2011 president of the Financial Stability Board at the Bank for International Settlement (BIS) is the “enforcer” of the policy. Carney came in just a few days after the FSB guidelines were announced in October 2011 under the watch of Mario Draghi who, like Carney, is a former executive at Goldman Sachs. In the meanwhile, Minister of Finance Jim Flaherty has included in his recent budget Economic Action Plan 2013, on pages 144-145, directives to implement a “bail-in regime” for systemically important banks in Canada:

"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.

"The Government intends to implement a comprehensive risk management
framework for Canada’s systemically important banks. This framework will
be consistent with reforms in other countries and key international standards,
such as the Financial Stability Board’s Key Attributes of Effective Resolution
Regimes for Financial Institutions
, and will work alongside the existing Canadian
regulatory capital regime. The risk management framework will include the
following elements:

"Systemically important banks will face a higher capital requirement,
as determined by the Superintendent of Financial Institutions.

"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."

Glass-Steagall or Die

Only a global Glass-Steagall system can prevent the genocide levels of austerity presently in the implementation stage and bring about a more just new worldwide credit system capable of issuing large amounts of productive public credit for world reconstruction. [GG]

See also:

- ’The Cyprus Template: ’Your Money AND Your Life

- ’Too Big To Close’: those who voted for Dodd-Frank are in on deposit robbery