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Here We Go Again: EU Lawmaker To Push For Bail-In Resolution Law For Deposits Over €100K
Here we go again:
- EUROPEAN PARLIAMENT TO PUSH FOR DEPOSITORS WITH ABOVE 100,000 EUROS TO FACE BAIL-IN UNDER NEW BANK RESOLUTION LAW - EU LAWMAKER - RTRS
Basically, this is DieselBOOM ver 2.0. How long until someone scrambles to announce that this, too, was taken out of context?
More as we see it but the EURUSD sure isn't waiting. Instead, it is plunging.
Full Reuters article:
The European Parliament will demand that big savers take losses if their banks run into trouble, a senior lawmaker told Reuters, adding momentum to a policy unveiled as part of a Cypriot bailout.
Although some policymakers have sought to portray Cyprus and the losses suffered by depositors at two of its banks as a one-off, many experts believe it marks a dramatic change in tack in how Europe deals with troubled banks, to spare taxpayers who have been on the hook for previous bailouts.
Jeroen Dijsselbloem, head of the Eurogroup of euro zone finance ministers, said on Monday that in future, the currency bloc should first ask banks to recapitalise themselves, then look to shareholders and bondholders and then "if necessary" to uninsured deposit holders.
Now the likelihood is rising that tough treatment of big depositors will be written into a new EU law, making losses for large savers a permanent feature of future banking crises.
"You need to be able to do the bail-in as well with deposits," said Gunnar Hokmark, an influential member of the European Parliament, who is leading negotiations with EU countries to finalise a law for winding up problem banks.
The European Parliament has an equal say alongside EU countries when deciding who must bear the brunt of future bank failures such as those now being seen on Cyprus.
"Deposits below 100,000 euros are protected ... deposits above 100,000 euros are not protected and shall be treated as part of the capital that can be bailed in," Hokmark told Reuters, adding that he was confident a majority of his peers in the parliament backed this line.
The law, which will also introduce means to impose losses on bondholders, is due to take effect at the start of 2015. Germany wants provisions for bailing in bondholders and others in the same year, though that may be delayed.
The European Commission wrote the first draft of the law but left it to member countries and the parliament to decide whether and when savers should face losses, when a failing bank is being salvaged or shuttered. Earlier on Tuesday, it said only that such a step was possible.
Hokmark urged savers to check their banks' health before taking the risk of depositing money.
"If you put your money in Royal Bank of Scotland ... or Deutsche Bank, depending on how that bank is working you are taking a risk," he said. "You need to be aware that you are taking a risk.
"I want us to legislate in a way that makes investors aware of the risk," said Hokmark, adding that savers should be asking whether their bank is solvent. "The bail-in instrument is creating thousands and thousands of supervisory authorities."
Cypriot President Nicos Anastasiades agreed in a last-ditch deal to close down the second-largest bank, Cyprus Popular, and inflict heavy losses on big depositors, many of them Russian, after Cyprus's financial sector ran into trouble when investments in Greece went sour.
"The markets may be shocked but some principles have to be laid down," said one EU official, speaking on condition of anonymity, adding that it would be "unfair" for the new EU law to take a different approach to that used in Cyprus.
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Absolutely incredible. So now the banker swine are telling us simpletons that we must realize making deposits carries inherent risk? So for 0.01% interest per year on that deposit, we assume the possibility of taking a 40% haircut on that deposit with absolutely no forewarning whatsoever? Then these ratfuck bankers talk down to us like this is some kind of common knowledge? I try not to get too angry about what I read over a computer screen, but the messages popping up for me in black and white these days are infuriating.
You beat me to it.
I mean, they talk down to us like placing your deposit in a bank is a now an investment. That it's our responsibility to do our homework, and research the bank before making a deposit. How in the hell can you do this, when their balance sheets are a fraud? I'd dare say the banks lie about everything, balance sheets, deposits, derivatives, loans, on and on. The audacity of all of this is mindblowing.
I tell my folks the same thing, whats the POINT of a bank anymore? They don't pay you a damn thing to take your money and lose it then one overnite they'll just tell you not only is their principal gone, but YOU have to pay for their loss too? It's utter insanity on display...the whole world has lost it's ever-lovin MIND!
Indeed, it has. Where the bottom is nobody knows.
I suspect the bottom is a bunch of bankers AND political elites swinging from street lamp posts!
'Do the homework on the banks numbers'...LOL yea is that WITH or WITHOUT counting the banks 2 sets of books, the FED's 100% intervention in MBS and bonds and all the rest of this shit? It can implode any MINUTE!
I sit back 10 feet, with binoulars, from my monitor when reading upsetting info.
Bestbuy's bottom line rose from me buying monitors...
Hokmark- 'Check your banks 'riskiness' before depositing your moneys at 0% interest while risking 40% loss at any moment'....UH..GEE NO THANKS!!
How does this not cause the market to crash? Might this be the plan? The entire banking model is layed wide open as being broken.
doesn't take affect until 2015, plenty of time to get out
on the other hand, they were going to do this right away in Cyprus with no warning
soooooo, not sure i would wanna wait around
Right...they pulled Cyprus overnite...but don't worry, now there's a 2 year comfortable 'safety zone' so redeposit your money with us banksters at 0% and forget about it...you can trust us really!
Satisfying as it is to bash all bankers, I have to like this one. He tells the truth... at least occasionally. There can be no free lunch. A depositor should do due diligence before parking his money in a bank.
I was amused by how Soroya Surhadi Nelson on NPR described the latest Cypress bank deal. After describing the serious problems the banks were in, she went on to say the latest deal allowed the Cypress banks to "tap into" the accounts of their customers. Like it was fresh maple syrup and they were just inanimate objects. No judgemental terms like "confiscate" or "steal". No hint of any disapproval of the bankers or thought that they too should be punished.
We are a long way from the old saying that "short bankers should hang from long ropes".
Like how a vampire just 'tap's into' the jugular vein a wee little bit....hey the important thing is the vampires get to survive right?
Today's EUR/USD chart looks like an ECG. Prognosis - Cardiac arrest for the Euro.
LOL. Thanks for bringing some much needed humour to the party :-)
The Simple truth here.
If you don't spend your money soon, WE WILL.
Signed,
Your friendly neighborhood central banker.
Random question: why does the graph show EURBGN but get a typed-on label of EURUSD? The price quote is obviously EURUSD, because the Bulgarian Lev (BGN) is trading at 1.96.
As I alluded to in a previous article, if depositors are to be taken to the cleaners, they should demand a far higher interest rate on their deposits to reflect the much higher risks. Such demands will blow a hole in governments' Zirp policies. Good. "A rod for their own back" comes to mind.
Exactly, what they demand we accept is 0% for us, while we're being told 40% risk of loss is just what's needed to keep the system going?
I refuse to participate in this shit evermore.
thats the exact same argument for stocks, 'theres no where else', so one is supposed to embrace at 2% yeild, hope for another 10% upward move, while 'staying the course/buy and holding' through 15/20/30% corrections. the risk return equation is way out of balance, but of course the govt would 'let' anything bad happen.
"The bail-in instrument is creating thousands and thousands of supervisory authorities."...he is correct, all those depositors will shortly be suprevising the withdrawal of their funds...
I'm UK based.
My bank account got closed at just after 10:00am this morning.
My mattress is now uncomfortable, but I will cope.
Indeed.
And when I get back to the UK from a longish foreign trip in Sth America, I'll be doing the same.
I will look more closely at PMs and crowd-funding as alternatives to keeping money in a "safe as houses bank". Clearly, neither the banks nor government have a shred of honesty among them. Enough is enough. We're being run by a criminal syndicate.
You can compress all that paper into several ounces of yellow shiny metal. Then you'll sleep comfortably
Time to buy a gun folks
Just bought another Benelli M4 this weekend, ordering tacticool parts for it as we speak. My source won't have any collapsible stock until Mid April though. :(
Now the likelihood is rising that tough treatment of big depositors will be written into a new EU law, making losses for large savers a permanent feature of future banking crises.
Not a good sign when they pass legislation making common crime into the law of the land.
On top of all the insanity, it's just more class warfare. Keep the common folk happy on cake and sports shows, while thinking the the evil rich are really getting it stuck to them. Never realizing of course, that the rich don't lose and will pass their losses on their employees and customers through lower wages, less benefits, and higher prices. It's OK though, March Madness is on!
Banker: "Jumping off a building isn't risky until you hit the ground." I guess that's the logic being used by the EU/IMF.
I'm in Europe and NO bank gets more than enough to pay the bills. The rest I'll leave your to imagination.
After the failed attempt by the Troika to shaft Cypriot depositors with ANY amount on deposit, they changed the plan to only include those with €100k +. (And of course left several escape routes open for Russian oligarchs to get their money out before the sucking noise began).
Point is, people everywhere will now be splitting their deposits across numerous banks to avoid going over so-called "insured levels".
But I don't believe when the next expropriation happens (Spain?) that it'll be limited to those with €100k +. It'll be across the board methinks. This is a step-by-step goosestep march towards impoverishing everybody who has dared to save and not spend.
Wonder if all of the Feds deposits with the Eurobanks get special treatment.....
Going long German bank vault builders.
With all the money that's going to be sloshing around Germany, could this foment another Weimar moment?
Ve have all de monies. Ve are rich! You vant milk? 500 euros. Danka.