A Crisis Worse Than Islamic State? Bank ‘Bail-Ins’ Begin

[eridani]

http://www.truthdig.com/report/item/a_crisis_worse_than_isis_bail-ins_begin_20151229

At the end of November, an Italian pensioner hanged himself after his entire €100,000 savings were confiscated in a bank “rescue” scheme. He left a suicide note blaming the bank, where he had been a customer for 50 years and had invested in bank-issued bonds. But he might better have blamed the EU and the G20’s Financial Stability Board, which have imposed an “Orderly Resolution” regime that keeps insolvent banks afloat by confiscating the savings of investors and depositors.

Some 130,000 shareholders and junior bond holders suffered losses in the “rescue.”

The pensioner’s bank was one of four small regional banks that had been put under special administration over the past two years. The €3.6 billion ($3.83 billion) rescue plan launched by the Italian government uses a newly-formed National Resolution Fund, which is fed by the country’s healthy banks. But before the fund can be tapped, losses must be imposed on investors; and in January, EU rules will require that they also be imposed on depositors. According to a

That is all happening in the EU. Is there reason for concern in the US?

According to former hedge fund manager Shah Gilani, writing for Money Morning, there is. In a November 30th article titled “Why I’m Closing My Bank Accounts While I Still Can,” he writes:

[It is] entirely possible in the next banking crisis that depositors in giant too-big-to-fail failing banks could have their money confiscated and turned into equity shares. . . .

If your too-big-to-fail (TBTF) bank is failing because they can’t pay off derivative bets they made, and the government refuses to bail them out, under a mandate titled “Adequacy of Loss-Absorbing Capacity of Global Systemically Important Banks in Resolution,” approved on Nov. 16, 2014, by the G20’s Financial Stability Board, they can take your deposited money and turn it into shares of equity capital to try and keep your TBTF bank from failing.

[djean111]

1. For some reason, this makes me picture Jamie Dimon, sitting on a pile of ALL of our money,

admiring his presidential cufflinks and swilling champagne. And laughing his ass off.

[antigop]

2. and paying the Clintons for more speeches. nt

[truedelphi]

4. And all the while, Dimon is wearing that medal that Obama gave him! n/t

[CrispyQ]

3. Sending to my friend,

who didn't believe me when I told her banks can take your deposit & give you worthless bank stock in exchange.

At over 2,300 pages and still growing, the Dodd Frank Act is currently the longest and most complicated bill ever passed by the US legislature.

Who knows what other shit they hid in there.

The system isn't broken. The system is fixed.

[truedelphi]

5. Your last line, it would totally crack me up,

If it was not so true and so scary!