Americablog: Think your bank deposits will always be 100% guaranteed by the FDIC? Think again

from AmBlog’s Gaius Publius ..

There’s an international move by national governments to write regulations that permit deposit confiscation in the case of bank failure. This is exactly the Cyprus model, and [] confiscating deposits was being considered or enabled prior to Cyprus bank-failures .. Here’s what the New Zealand government says about [its] “Open Bank Resolution” [policy]: “The OBR policy is designed to ensure that first [crisis] losses are borne by the bank’s existing shareholders. In addition, a portion of depositors’ and other unsecured creditors’ funds will be frozen to bear any remaining losses” .. Just as the New Zealand plan has been in process for a while, so is a similar plan in the U.S. and the U.K .. The next banking crisis is anticipated to dwarf the last one, and [since no one will stand for another taxpayer bailout] the Bigs have been making plans to bail it out with depositor funds, not taxpayer funds [effectively ending insured deposit policy]. Cyprus is just the first implementation

where go? what do? .. read more

 

 

This entry was posted on Thursday, April 4th, 2013 at 7:32 AM and filed under Australia & Pacific, Economics, Europe, Legal. Follow comments here with the RSS 2.0 feed. Skip to the end and leave a response. Trackbacks are closed.

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