WE HAVE TO PAY ATTENTION GUYS!!!! The latest plan adopted by the G20 nations is to legitimize the theft of our savings in order to prop up irresponsible and unscrupulous bankers. Since the financial crisis of 2008, central bankers and regulators have been busy drawing up plans for avoiding the next bank melt-down. In the US, banks considered by the government Too Big To Fail (TBTF) were bailed out six years ago with our tax money on the arguable rationale that if they were permitted to fail, they would take the entire economy down with them. The crisis led to a loud outcry from taxpayers and many savvy experts. They called for a breakup of TBTF banks as the most effective way to avoid future failures and the economic turmoil they engender. But at the G20 meeting last month in Australia, the Federal Stability Board (FSB) presented and received approval for their latest plan for conducting the resolution proceeding, i.e. bankruptcy, for a troubled TBTF bank. The FSB that now regulates banking globally began as a group of G7 finance ministers and central bank governors organized in a merely advisory capacity after the Asian crisis of the late 1990s. Although not official, its mandates effectively acquired the force of law after the 2008 crisis, when the G20 leaders were brought together to endorse its rules. This ritual now happens annually, with the G20 leaders rubber stamping rules aimed at maintaining the stability of the private banking system, usually at public expense. Cutting to the chase, the pertinent part is that instead of tax money going to bail out the banks next time, it will potentially be their customers bank deposit money! The FSB recommended that governments make statutory the confiscation of depositors money (also known as unsecured debt) if the assets of the bank plus all secured debt is insufficient to keep them afloat. This is known as a bail-in. Further, the FSB has put pension funds at risk as well. They require banks to hold a buffer of securities to be liquidated to prevent insolvency ahead of resorting to deposits. Among other instruments in these buffers are bonds in which pension funds are invested. For instance, if you have a good amount of cash in a Wells Fargo savings account and your pension fund is invested in bonds which WF owns in their emergency buffer account, if/when the next financial crash occurs, then WF, heading for insolvency, will be required to liquidate its assets and secured debt to raise cash. If that is insufficient the buffer securities (pension funds) will be sold off next. And if THAT is insufficient, the regulators will go after the cash in large deposit accounts first, then, perhaps even the smaller ones. A far better solution is to break up the TBTF banks proactively, thus avoiding the bankruptcies and the need to save the banks on the backs of the people. Which is why we should support Elizabeth Warren and other top liberals who are coalescing around a campaign to derail President Barack Obama’s nominee of a top Wall Street investment banker for a senior administration job. The campaign against Obama’s nomination of Lazard banker Antonio Weiss to be undersecretary of Treasury for domestic finance gained more traction on Tuesday as a national progressive group announced it had gathered 100,000 signatures on a petition opposing Weiss.
Posted on: Sun, 07 Dec 2014 06:00:50 +0000
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