Tuesday, August 12, 2014

The U.S. Plans To Bail-In The Banks – Federal Reserve Vice Chairman

smaulgld.com

 Bank Bail-ins are coming to the United States

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In a speech yesterday, in Stockholn Sweden, Vice Chairman of the Federal Reserve and former governor of the Bank of Israel and former chief economist at the World Bank, Stanley Fisher noted:
“As part of this approach, the United States is preparing a proposal to require systemically important banks to issue bail-inable long-term debt that will enable insolvent banks to recapitalize themselves in resolution without calling on government funding–this cushion is known as a “gone concern” buffer.”
Mr. Fisher gave no details as to whom in the United States was preparing the bail-in proposal and what “bailinable long term debt” is.

It Happened in Cyprus, But Can It Happen Here?

In spring of 2013 the failing European Bank of Cyprus performed a bail-in that required depositors to help save the bank by foregoing a large portion of the money they had deposited in the bank. In return for their forebearance, depositors were given equity shares in the failing bank.

Customers who deposit money in banks are lending that money to the bank. Depositors are in effect, unsecured creditors. If the bank fails, depositors get in line with other unsecured creditors to see how many cents on the dollar, if any, they can retrieve.
In the United States to offset this result, the Federal Deposit Insurance Corporation (FDIC) since 1933 insures bank deposits up to $250,000*. THe FDIC, however, is woefully underfunded to handle payouts in the event of a large bank failure. The new proposal is designed to allow failing banks to get back on their feet “without calling on government funding.”

Under the proposed bail-in scenario, the faiure of a “sytematically important bank” (a.k.a. “too big to fail”) will receive no government funding to stay afloat. In order to keep their casino doors open, a too big to fail bank will just call on their loyal depositors to help out by taking whatever percentage of the depositors’ money they need to stabilize the bank.

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1 comment:

  1. The Federal Reserve embezzles a trillion dollars annually using the FRBNY's exclusive handling records of auction accounts of Treasury securities. (the plebs are told by the MSM the Treasury handles the accounts). Ref : http://www.scribd.com/doc/101937790/Federal-Reserve-Heist .

    The Federal Reserve operates a Ponzi scheme that is inherently designed for national bankruptcy. It is the same scheme the Rothschilds have used for centuries. Ref. http://www.scribd.com/doc/48194264/rip-off-by-the-Federal-Reserve-revised

    The embezzled profits of the Fed have funded Wall Street's movement to the New World Order.  Ref. http://www.scribd.com/doc/115919607 FUNDING THE NEW WORLD ORDER .

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