RBC Begins To Issue ’Bail-in Bonds’ As Europe Prepares To Shut Down A Significant Number Of Large Banks
9 April 2014
(CRC)—On March 20 the European Finance Ministers hastily hammered out a deal to establish a ‘Single Resolution Mechanism’ (SRM). As LPAC reported on March 21, this was done in order to prepare their nations for “the shutting down of a significant number of the 120 largest banks by bailing-out and/or bail-in the bad debt and absorb these failed banks into the Too Big To Fail banks”.
On April 1st Executive Intelligence Review’s Paul Gallagher wrote in ‘ Bail-In Bonds’ Signal Coming Financial Crash that “Bail-in Bonds” are more or less openly worthless securities, made to absorb large losses when the toxic assets filling the biggest banks’ books are revealed again, as they were in 2007-2008. Banks have started issuing these bail-in bonds largely to one another, and to shadow banks.
“…The issuance of such “bail-in bonds” by big banks in Europe has been occurring since early March…Their qualification as so-called Tier II bank capital is part of the requirement of the European Commission’s mandatory bank bail-in regime announced March 20 as the so-called Single Resolution Mechanism (SRM) of a European Banking Union. That long title is intended to establish that, as of 2016, “bail-in” will be the only procedure for resolving “systemically important” megabanks which are insolvent.”
The Financial Post has revealed on February 14 in the article “ Bail-in Bonds” riskier than previously thought, Standard & Poor’s warn,” that “In this country, only Royal Bank of Canada has issued bail-in bonds, announcing the sale last month of $500-million of hybrid pref shares that convert to common equity if the Office of the Superintendent of Financial Institutions determines that the bank is no longer viable.”
Already in May of 2013, the Committee for the Republic of Canada had warned that the Bank of Canada and the Office of the Superintendent of Financial Institutions were preparing to bail-in citizen’s bank deposits!
As economist Ellen Brown of the Public Banking Institute wrote of the oncoming bail-in crash titled “Banking Union Time Bomb” :
“And it’s not just the EU that has bail-in plans for their troubled too-big-to-fail banks. It is also the US, the UK, Canada, Australia, New Zealand and other G20 nations. Recall that a depositor is an unsecured creditor of a bank. When you deposit money in a bank, the bank “owns” the money and you have an IOU or promise to pay.
“…Only after the taxpayers—and the depositors—are stuck with the tab will the curtain be lifted and the crippling insolvency of the banks be revealed. Predictably, panic will then set in, credit will freeze, and the banks will collapse, leaving the unsuspecting public to foot the bill.”
We invite our readers to read and circulate the latest national leaflet issued in the United States by LPAC titled: "The Cable Has Been Cut” LaRouche: British Empire’s “Bail-in” Is Driving Thermonuclear World War III [The Editor]