Cyprus style confiscation prepped for Canada
Posted: Tue Apr 02, 2013 10:29 pmI couldn't believe it when I read it but it's true!
The Canadian Government is proposing seizing deposits just like what happened in Cyprus.
Check out pages 144 and 145 of the Government of Canada's 2013 "Economic Action Plan" (http://www.budget.gc.ca/2013/doc/plan/b ... 13-eng.pdf) that they distributed on March 21, literally during the Cyprus disaster. Unbelievably, they are saying that what just happened in Cyprus will be used as a blueprint for any future bank failures in Canada.
The below is cut and pasted from the 2013 budget:
"Canada’s large banks are a source of strength for the Canadian economy. Our large banks have become increasingly successful in international markets, creating jobs at home.
The Government also recognizes the need to manage the risks associated with systemically important banks — those banks whose distress or failure could cause a disruption to the financial system and, in turn, negative impacts on the economy. This requires strong prudential oversight and a robust set of options for resolving these institutions without the use of taxpayer funds, in the unlikely event that one becomes non-viable."
So if taxpayer funds will not be used to shore up a failing bank, but it has been deemed "too big to fail", where will the prop-up funds come from?
"The Government proposes to implement a “bail-in” regime for systemically important banks. This regime will be designed to ensure that, in the unlikely event that a systemically important bank depletes its capital, the bank can be recapitalized and returned to viability through the very rapid conversion of certain bank liabilities into regulatory capital. This will reduce risks for taxpayers. The Government will consult stakeholders on how best to implement a bail-in regime in Canada. Implementation timelines will allow for a smooth transition for affected institutions, investors and other market participants."
The "certain bank liabilities" that are being referenced here are our deposits. I may suck at accounting, but even I recognize that our assets (i.e. our deposits) are the banks liabilities. It doesn't say the banks shareholders and bondholders will be punished. It says that Canadians will have their savings accounts "[rapidly converted] ... into regulatory capital" so "the bank can be recapitalized and returned to viability".
Bail-ins have also been proposed in Spain, Portugal, Greece and Italy. The poo is well and truly hitting the blades now.
Never has it been so important to not keep a dime over $100,000 in any single bank. In Cyprus, what began as a 10% seizure of deposits over $100,000 became 40% and then finally 80%, with the finance minister recently saying "realistically very little will be returned" (http://www.zerohedge.com/contributed/20 ... ion-scheme). So a heads up to all Canadians that your parents especially will need to distribute their retirement accounts over many different banks to limit their exposure to future deposit confiscations.
The days of thinking you could keep your money in a savings account to prevent it being stolen are behind us. If you walk up to a bank these days, you are more likely to be held up by the teller!
These are very crazy times.
The Canadian Government is proposing seizing deposits just like what happened in Cyprus.
Check out pages 144 and 145 of the Government of Canada's 2013 "Economic Action Plan" (http://www.budget.gc.ca/2013/doc/plan/b ... 13-eng.pdf) that they distributed on March 21, literally during the Cyprus disaster. Unbelievably, they are saying that what just happened in Cyprus will be used as a blueprint for any future bank failures in Canada.
The below is cut and pasted from the 2013 budget:
"Canada’s large banks are a source of strength for the Canadian economy. Our large banks have become increasingly successful in international markets, creating jobs at home.
The Government also recognizes the need to manage the risks associated with systemically important banks — those banks whose distress or failure could cause a disruption to the financial system and, in turn, negative impacts on the economy. This requires strong prudential oversight and a robust set of options for resolving these institutions without the use of taxpayer funds, in the unlikely event that one becomes non-viable."
So if taxpayer funds will not be used to shore up a failing bank, but it has been deemed "too big to fail", where will the prop-up funds come from?
"The Government proposes to implement a “bail-in” regime for systemically important banks. This regime will be designed to ensure that, in the unlikely event that a systemically important bank depletes its capital, the bank can be recapitalized and returned to viability through the very rapid conversion of certain bank liabilities into regulatory capital. This will reduce risks for taxpayers. The Government will consult stakeholders on how best to implement a bail-in regime in Canada. Implementation timelines will allow for a smooth transition for affected institutions, investors and other market participants."
The "certain bank liabilities" that are being referenced here are our deposits. I may suck at accounting, but even I recognize that our assets (i.e. our deposits) are the banks liabilities. It doesn't say the banks shareholders and bondholders will be punished. It says that Canadians will have their savings accounts "[rapidly converted] ... into regulatory capital" so "the bank can be recapitalized and returned to viability".
Bail-ins have also been proposed in Spain, Portugal, Greece and Italy. The poo is well and truly hitting the blades now.
Never has it been so important to not keep a dime over $100,000 in any single bank. In Cyprus, what began as a 10% seizure of deposits over $100,000 became 40% and then finally 80%, with the finance minister recently saying "realistically very little will be returned" (http://www.zerohedge.com/contributed/20 ... ion-scheme). So a heads up to all Canadians that your parents especially will need to distribute their retirement accounts over many different banks to limit their exposure to future deposit confiscations.
The days of thinking you could keep your money in a savings account to prevent it being stolen are behind us. If you walk up to a bank these days, you are more likely to be held up by the teller!
These are very crazy times.