EU Says Bank Money's Safe After Threats To Take It, Ireland Still Looks Next Up, Contagion Ready To Spread To Bigger Countries

Reggie Middleton's picture

Over the weekend, EU's Olli Rehn said big depositors could suffer in future bank bailouts under new law:

Olli Rehn
Olli Rehn.jpgOlli Rehn.jpg
European Commissioner for Economic and Monetary Affairs and the Euro
Incumbent
Assumed office
9 February 2010

(Reuters) - Big bank depositors could take a hit under planned European Union law if a bank fails, the EU's economic affairs chief Olli Rehn said on Saturday, but noted that Cyprus's bailout model was exceptional.

Okay, I get it now. Cyprus was exceptional, it's just that we are preparing for exceptional to be codified into law to make it common place. Of course!

"Cyprus was a special case ... but the upcoming directive assumes that investor and depositor liability will be carried out in case of a bank restructuring or a wind-down," Rehn, the European Economic and Monetary Affairs Commissioner, said in a TV interview with Finland's national broadcaster YLE.

The only thing "special case" about Cyprus was that it was first!

"But there is a very clear hierarchy, at first the shareholders, then possibly the unprotected investments and deposits. However, the limit of 84,890 pounds is sacred, deposits smaller than that are always safe."

Your "so-called liquid deposits" are absolutely not safe! As explored in "Mainstream Media Says Cyprus Salvaged By…"

Well, this is the latest from Bloomberg:

The revised accord spares bank accounts below the insured limit of 100,000 euros.

I was curious to see how they could impose losses on insured accounts in the first place, after all the accounts were insured basically (through implied backstop) by the same entities (EU/EC/ECB) that were attempting to force the loss, no?

Yes, the powers that be were not only clearly considering the confiscation of so-called insured assets, they actually were moving forward to implement such until the backlash was perceived to be strong enough to consider 'alternative measures'! Mr. Rehn's comments are still quite suspect, after all... Exactly what is the definition of "SAFE"? Does this include the ability to access your money? Again, as excerpted from "Mainstream Media Says Cyprus Salvaged By…"

Last week I posed the question "Is The Cypriot Government Crazy Or Do They Really Fear Bankers That Much?" The country even considering imposing loses on bank depositors over creditors seemed absurd at best. Even the faux consolation of compensating holders of pure liquidity (or at least what was formerly believed to be pure liquidity - banks have been closed for a week now and ATM withdrawals have been limited to 100 euro per day due to the capital controls I clearly warned of last year) was a scheme born out of lunacy, and unlikely to compensate anyone for anything.

You see, once capital controls (the same capital controls I clearly warned of last year) are placed upon your money in such a fashion as to prevent you from accessing it, is it still really your money??? I guess one can consider it safe, as long as you don't want any of it!!!

Now, I've been warning for the past two weeks or so that more of the same will likely come the way of the Irishman, reference: 

  1. Global Banking Crisis - How & Why YOU Will Get "Cyprus'd" As This Bank Scrambled For Capital!!!
  2. As If On Cue, BoomBustBlog Shenanigan Research Gets Real In Ireland, Why Aren't These Guys Knocking On My Door?
  3. Are You About To Get Cyprus'd in Ireland? When A Single Word's Worth Billions Of Euros...
  4. Dear Ireland (& AIB), Haven't We All Learned The Problem Is Insolvency, Not Liquidity?
  5. Oh No! Is It Possible? A 3rd Irish Bank With Hidden Charges Not Revealed In Its Annual Reports?
  6. Ireland, You May Very Well Be Bust & I Make No Apologies For What I'm About To Show You

I consider these posts to be a tour de force in investigative journalism and forensic financial analysis. In them, I have named 4 of Ireland's biggest banks as not having properly disclosed charges, borrowings and encumbrances. I actually have significantly more to go - yes, that's right - more banks, and even in more countries. This begs the question, how is it that the Irish people have to hear that their largest banks (several of them, not just one or two) have concealed these issues after extreme austerity and billions upon billions of euros of bailouts 

Hey, I have an even better question. Why is it that the Irish have to hear it and see the proof from a Blogger in NYC versus the (in no particular order):

  1. audit firms that audited the banks;
  2. the banks management;
  3. the sell side analysts that follow these banks;
  4. the politicians who create and oversee legislation regarding these banks;
  5. or the regulatory agencies that oversee these banks!

One would think that the audit firms would really be on the hook, no? I must assume the legal firms in Ireland are in no way as aggressive as they are stateside....

We just had a changing of the guard at the SEC in that states, and this is a perfect opportunity for the new guard to show that they are worth their mettle and represent a significant departure from the less than totally effective bastion of the recent past. You have hundreds of thousands of readers and subscribers watching you guys. Do the right thing!

Anyone who wishes to give the SEC a little nudge can read the links above and submit your thoughts directly. Simply contact the SEC and let them know that Reggie Middleton suggested they look into these articles and the related research. You can actually use this form to convey my message. My next post will reveal a BLOCKBUSTER, linking a bigger more systemic country to  the fray!

  1.  
      In the meantime, my professional & institutional subscribers can download the relevant info right now - along with several hundred pages of supporting documentation. See 

File Icon EU Bank Capital Confusion, Part 3 - It's BIG! Click here to subscribe or upgrade!

    More on this topic:
  1. Is The Cypriot Government Crazy Or Do They Really Fear Bankers That Much?
  2. Mainstream Media Says Cyprus Salvaged By…
  3. Economic Depression Is The New Success
  4. The Canadian Government Offers "Bail-In"…
  5. EU Bank Depositors: Your Mattress Is Starting To Look Awfully Attractive - Bank Risk, Reward & Compensation