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."- Advertisement -
"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."
"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."
Official policy endorses haircuts. Depositor funds will be used for recapitalizations. Implementation details weren't explained. Expect confiscation. Doing so reflects grand theft.
A previous article said banks legally own depositor funds. Our money is theirs. They can seize it in return for IOUs (promises to repay). Smart money says don't bet on it. It's gone. Once taken, expect little or nothing back.
It's the new normal. Cyprus isn't a one-off. Canada's preparing to march in lockstep. So is Europe. Russia Today (RT) headlined "European Parliament (EP) might shift bailout burden from taxpayers to depositors."
A new template was established. Cypriot confiscation's spreading. In may show up in a neighborhood near you. Bad ideas proliferate fast. Expect ordinary people to be hurt most.