Land Of The Rising Bail In: Deposit Confiscation Coming To Japan Next

Tyler Durden's picture

We now know that 'muddle through' is over, and just as we noted here "there may only be painful ways out of this crisis" as we evidenced by Europe's attack on Cypriot depositors. With the pillars of Abenomics starting to crumble, it seems plans are afoot to prepare for the bank failures that will come from a BoJ-inspired out-of-control bond market.

As Nikkei reports, Japan's Financial Services Agency will enact new rules that will forced failed bank losses on investors, if needed, via a mechanism known as a "bail-in."

The FSA report also notes that Mitsubishi UFJ (MTU), Mizuho Financial (MFG) and Sumitomo Mitsui (SMFG) are among those proposing amendments to allow them to issue the types of preferred shares or subordinated bonds that would be used in such cases.

So not only will Japanese banks suffer VaR shock-driven needs to reduce JGB holdings but a weaker deposit base will further exacerbate the delveraging.

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Uchtdorf's picture

The article does indeed use the word "toushisha" which is Japanese for investor. But if you're gonna take somebody's money and give him preferred stock or subordinated bonds in return what kind of investor do you think that would be? Right, the kind who invests by opening a regular account in the bank. In other words, Cyprus Part Deux 

Mentaliusanything's picture

If you deposit your hard earned into ANY Bank you are an "Unsecured Lender" ego you are a unsecured investor. The bank can do what it wants with it.. they can gamble it on a derivitave or loan it to a NINGA.They can buy shares in their own bank or buy dodgy Bonds. If it goes tits up you stand last in line. If you check World wide the Bail in is now dried ink. You think Cyprus was a one off?. First to move when one of the top 20 get burnt will at least have some cash and that cash will buy you what you bid. Trust me on this. Return of Capital trumps return on Capital in any card game you boys like to play in.

NoTTD's picture

Post Cyprus, "investors" = "Depositors".

Mine Is Bigger's picture

The Japanese are famous for keeping their wealth in bank deposits.  This is a scheme to scare them into moving money into what the parasites want -- securities, properties, etc. to steal their money "legally."  The Wall Street has been dying to get their hands on the massive Japanese private-sector wealth.  Abe and other U.S. puppets are making things easier for Wall Street banksters.  

Non Passaran's picture

Don't know about that... That sounds like a scheme to push a sane person into buying (more) PMs

kito's picture

More signs that they will skank (h/t fonz) the money rather than bail out the banks by printing........get ready folks and keep dollars outside the system.....

fonzannoon's picture

I mean could they not make it more obvious? WTF? Who announces the skank pre skank?

That used to defeat the purpose??????

NoTTD's picture

They have an appointed offical called the Skankmeister to announce that.

BeerBrewer09's picture

Inflationary scenario still makes the most sense. They can buy a bunch of commodities with newly created currency before inflation trickles down, right up until it goes parabolic. Then when everyone is holding the (worthless) bag, they buy even more stuff with the commodities they bought before. WIN!

It does make sense to keep PMs/FRNs outside of any system. FRNs will work right up until they don't, in which case you will need PMs for when everything goes black market.

Bail-ins would create immediate bank runs. You can't hide bail-ins. Inflation is the much more cowardly and slow way to boil a frog. If you keep telling people there is no inflation based on some bogus government lies, they might actually believe it! Also, the key with inflation is that most people don't understand the way it works or even who to blame, so they work longer hours, go further into debt, etc. Even fewer people know how to protect themselves from inflation. I know a lot of seemingly intelligent people that can't figure out why the stock market is so high, and everything is getting so expensive, and they can't find a job, etc.

TPTB win tremendously through hyperinflation. They get vastly wealthier, buy everything, and get to control people even more than they do now. They also choose what happens afterwards. Sure, some of us will do great, but they will dominate. Put it together, man.

three chord sloth's picture

Twenty years too late. They should've ackowledged these banks had failed decades ago.

yogibear's picture

Instead of going Kamikaze on the banksters they will probably commit suicide. The banksters know this.

Nue's picture

You know back in a sane world. When you said investor and bank in the same sentence you were talking about the stock and bond holders. Now your talking about the depositors. In which case why even have deposit insurance.

OneTinSoldier66's picture

Becuase you have to keep up the pretense that Bankers are important, and honorable men.


Seriously, you couldn't have possibly asked a better question Nue! Doh!

giggler123's picture

The moment that happens; then its game over for euroland, people will see what started at home has happened again in such a short period of time over seas that even the silver generation cant simply ignore?  can they?

Funny, I spoke to my work colleage about the loss of depositor money and he never heard anything about it.  He said, I don't listen to the news.  But when I told him, he was googling, asking around the office, do you think they'll do it here in the UK?  Very interesting and makes me wonder how many just simply ignore everything until its in their face.

smacker's picture


The term that's been adopted in the US/UK/EU and elsewhere by the political and central bank criminals to confuse depositors and distract them away from the Cypress term "bail-in" is "Bank Resolution".

This document dated 10th December 2012, issued jontly by the BoE & US FDIC sets out in confusing banker-speak what their plans are for bail-ins if/when the need arises:

  "Resolving Globally Active, Systemically Important,  Financial Institutions"

It is my view that in the UK, no forewarnng of a bank bail-in will be given by anybody. People will simply wake up one morning to hear that XYZ Bank is closed for 2-3 days whilst it take actions to "resolve" itself. Meaning, while it runs its computers to steal money from depositor accounts.

Perhaps the most devious aspect is that in the UK, the BoE & commercial banks have the authority to go ahead and implement the policy without any official public announcement by the Chancellor, thereby saving the Chancellor from getting it in the neck. He will simply duck the issue and pass it over to the banks as if it has nowt to do with him.

NoTTD's picture

You mean it would be a  surprise attack?    Well, the Japs are experts at that.

smacker's picture

Not if one believes the conspiracy theories ...

Wile-E-Coyote's picture

Umm I was thinking if the people around Fukushima are radioactive therefore they should be classed as a biohazard. Are these individuals allowed to travel freely? Imagine sitting on a Trans Pacific flight with one of these people; that nice warm feeling might be something sinister.

NoTTD's picture

Banzai,  motherfuckers!!!