The ‘bank bail-ins’ have begun, private savings in banks are no longer safe

“Once your money is deposited in the bank, it legally becomes the property of the bank … If you bank with one of the country’s biggest banks, who collectively have trillions of dollars of derivatives they hold “off balance sheet” (meaning those debts aren’t recorded on banks’ GAAP balance sheets), those debt bets have a superior legal standing to your deposits and get paid back before you get any of your cash.”

Excerpted from Ellen Brown:

“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 December 10th article on

The rescue was a “bail-in” – meaning bondholders suffered losses – unlike the hugely unpopular bank bailouts during the 2008 financial crisis, which cost ordinary EU taxpayers tens of billions of euros.

Correspondents say [Italian Prime Minister] Renzi acted quickly because in January, the EU is tightening the rules on bank rescues – they will force losses on depositors holding more than €100,000, as well as bank shareholders and bondholders.

. . . [L]etting the four banks fail under those new EU rules next year would have meant “sacrificing the money of one million savers and the jobs of nearly 6,000 people”.

That is what is predicted for 2016: massive sacrifice of savings and jobs to prop up a “systemically risky” global banking scheme.”


You can move your money into one of the credit unions with their own deposit insurance protection; but credit unions and their insurance plans are also under attack. So writes Frances Coppola in a December 18th article titled “Co-operative Banking Under Attack in Europe,” discussing an insolvent Spanish credit union that was the subject of a bail-in in July 2015. When the member-investors were subsequently made whole by the credit union’s private insurance group, there were complaints that the rescue “undermined the principle of creditor bail-in” – this although the insurance fund was privately financed. Critics argued that “this still looks like a circuitous way to do what was initially planned, i.e. to avoid placing losses on private creditors.”

In short, the goal of the bail-in scheme is to place losses on private creditors. Alternatives that allow them to escape could soon be blocked.

We need to lean on our legislators to change the rules before it is too late. The Dodd Frank Act and the Bankruptcy Reform Act both need a radical overhaul, and the Glass-Steagall Act (which put a fire wall between risky investments and bank deposits) needs to be reinstated.

Meanwhile, local legislators would do well to set up some publicly-owned banks on the model of the state-owned Bank of North Dakota – banks that do not gamble in derivatives and are safe places to store our public and private funds.”

1 Comment The ‘bank bail-ins’ have begun, private savings in banks are no longer safe

  1. Keith

    Nothing new.

    Deposit money with the bank, the bank goes bust, the creditors seize the money.

    The only thing that protects depositors, is the scheme that exists in the UK, whereby deposits up to a maximum value are protected by a government scheme. The actually sum, has recently been reduced.

    The banks should have been allowed to go bust, small depositors were protected. Not, trillions of dollars of confected money created to prop up criminal banking sector.

    What happened in Cyprus in 2013, the EU stole money from anyone with over 100,000 euros in the bank.

    Corrupt politician were tipped off, as was Russian Mafia, and all their dirty money was withdrawn before EU stole money.

    The people who were hit were small businesses, who, at the start of the tourist season had surplus funds in the bank, ready to restock, pay wages.

    A car hire business was very lucky, they bought new cars a few days before the theft, also paid student fees for daughters, took them below 100,000.

    What happened in Cyprus was a trial run for Greece two years later.

    Cyprus crisis created interest in bitcoin, a quick and dirty means to transfer money out of euros, out of Cyprus.

    But it was not only the theft of money by EU. Banks shut their doors, the banking system stopped functioning, no one could get credit. Businesses were having to pay their suppliers on delivery in cash. The tourist industry took a hit, no one who had not booked a holiday was going to go to a country where they could not be certain anything would be functioning. Cypriots, even months later, were in a state of shock, they saw it as the worst crisis since Turkey invaded in 1974. Turkish military still occupies the north of the island.

    What was tragic, corrupt Cypriot politicians rolled over and let the Fourth Reich walk all over them.

    The tourist industry has not recovered and has since gone into free fall.

    Basically what this tells us, is that no bank deposits in euros are safe in the eurozone.

    It also tells us that people must revert back to using cash. Why aid bank profits?

    We must also move to open coops, sharing, collaborative economy.

    We must also break up the banks, split casino banking from retail banking, force banks to pay into a bond scheme to protect small savers (we have similar scheme in UK for airlines and tour companies).

    The signs are not good.

    In UK the FCA is now back peddling on bank regulation, no prosecution of HSBC for money laundering and tax evasion, scrapping of an investigation into the spiv culture in banks, green light to obscene bank bonuses, peddling of dodgy products (Santander is to hire new staff to peddle dodgy financial products).

    The financial sector has been allowed to grow too big where it is a dominant sector of the economy. It must be smashed. Other sectors of the economy supported, investment in green infrastructure.

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