Deposits and pensions are now legally part of Banks capital. When banks reach their next crisis point of too obvious to obfuscate anymore insolvency but still cant be safely allowed to go through orderly insolvency like any other private company because they create 98.2% of the public utility of the money supply and governments have done nothing remotely adequate to reform that unconstrained systemic risk since the last global monetary crisis, instead of or as well as a public bailout theyll be able to rely on public bail-in to re-capitalise enough to stave off the appearance of insolvency for another few years. In order to actually implement a genuinely free market there have to be basic rules about profit-making private companies being obliged to bear the risks of their own economic activities. State underwriting and implicit subsidies for the finance sector are not capitalist in any principled sense. Banks cannot safely be allowed to go through standard orderly insolvency procedures until the public utility of the money supply is no longer dependent on them. See positivemoney.org.uk for an interim pilot study sized solution and an ultimate systemic reform proposal. Thanks Guy Harper for adding this new outrageous thing to my list.
Posted on: Thu, 11 Dec 2014 12:18:01 +0000