Depositor Haircuts Spreading
by Stephen Lendman
Bank accounts no longer are safe.
A previous article called them the new normal. Bad ideas spread fast. Canada endorses Cypriot harshness. Its "Jobs Growth and Long-Term Prosperity: Economic Action Plan 2013" says so.
On March 21, it was submitted. It endorsed depositor haircuts. It did so before Cypriot trouble erupted. Its "Establishing a Risk Management Framework for Domestic Systemically Important Banks section (pages 144-145) states:
"Canada's large banks are a source of strength for the Canadian economy."
"The Government".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, (have) negative impacts on the economy."
"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."