quote:

The European Union will seek on Friday to forge rules to force losses on large savers when banks fail, a sensitive reform that could shape how the euro zone deals with its sickly banks.

Finance ministers in Luxembourg will try to resolve one of the most difficult questions posed by Europe's banking crisis - how to shut failed banks without sowing panic or burdening taxpayers.

"The costs of future restructurings can't be wished away," said a senior EU official involved in the talks. "We need a mechanism to shift the burden away from taxpayers."
The European Union spent the equivalent of a third of its economic output on saving its banks between 2008 and 2011, plundering taxpayer cash but struggling to contain the crisis and in the case of Ireland (Other OTC: IRLD - news) , almost bankrupting the country.

But France and Germany are divided over how strict the new rules should be, with Paris worried that imposing losses on depositors could prompt a bank run.
A draft EU law that will form the basis of discussions recommends a pecking order in which first bank shareholders would take losses, then bondholders and finally depositors with more than 100,000 euros (85,090 pounds) in their account.

That would make the harsh treatment of savers, which was part of Cyprus's bailout in March, a permanent feature of Europe's response to future banking crises. EU countries would be required to follow these rules when closing banks.

quote:

ORIGINAL: YN
While this has been speculated in the press, it now appears to be taking shape as a policy -

quote:

The European Union will seek on Friday to forge rules to force losses on large savers when banks fail, a sensitive reform that could shape how the euro zone deals with its sickly banks.
Finance ministers in Luxembourg will try to resolve one of the most difficult questions posed by Europe's banking crisis - how to shut failed banks without sowing panic or burdening taxpayers.
"The costs of future restructurings can't be wished away," said a senior EU official involved in the talks. "We need a mechanism to shift the burden away from taxpayers."
The European Union spent the equivalent of a third of its economic output on saving its banks between 2008 and 2011, plundering taxpayer cash but struggling to contain the crisis and in the case of Ireland (Other OTC: IRLD - news) , almost bankrupting the country.
But France and Germany are divided over how strict the new rules should be, with Paris worried that imposing losses on depositors could prompt a bank run.
A draft EU law that will form the basis of discussions recommends a pecking order in which first bank shareholders would take losses, then bondholders and finally depositors with more than 100,000 euros (85,090 pounds) in their account.
That would make the harsh treatment of savers, which was part of Cyprus's bailout in March, a permanent feature of Europe's response to future banking crises. EU countries would be required to follow these rules when closing banks.

EU to decide who pays when banks fail
"Privatize the profits, socialize the losses."

• A Conservative interpretation of the US Constitution
  
• Personal Responsibility
  
• Help for the truly needy
  
• Limited Government
  
• Consumption Tax (non-profit charities and food exempt)
  

quote:

ORIGINAL: DesideriScuri


Isn't this, essentially, how the FDIC works? The "taxpayers" will fork over the funding to insure accounts up to 100k Euros, and the rest is "gone." Other than the $$ amounts, isn't that the FDIC?

I wonder how many 100k+ Euros accounts there are now and how many get siphoned to be under 100k Euros in the first month after this ruling gets passed (assuming it gets passed).

quote:

The 15-page FDIC-BOE document is called “Resolving Globally Active, Systemically Important, Financial Institutions.” It begins by explaining that the 2008 banking crisis has made it clear that some other way besides taxpayer bailouts is needed to maintain “financial stability.” Evidently anticipating that the next financial collapse will be on a grander scale than either the taxpayers or Congress is willing to underwrite, the authors state:

An efficient path for returning the sound operations of the G-SIFI to the private sector would be provided by exchanging or converting a sufficient amount of the unsecured debt from the original creditors of the failed company [meaning the depositors] into equity [or stock]. In the U.S., the new equity would become capital in one or more newly formed operating entities. In the U.K., the same approach could be used, or the equity could be used to recapitalize the failing financial company itself—thus, the highest layer of surviving bailed-in creditors would become the owners of the resolved firm. In either country, the new equity holders would take on the corresponding risk of being shareholders in a financial institution.

No exception is indicated for “insured deposits” in the U.S., meaning those under $250,000, the deposits we thought were protected by FDIC insurance. This can hardly be an oversight, since it is the FDIC that is issuing the directive. The FDIC is an insurance company funded by premiums paid by private banks. The directive is called a “resolution process,” defined elsewhere as a plan that “would be triggered in the event of the failure of an insurer . . . .” The only mention of “insured deposits” is in connection with existing UK legislation, which the FDIC-BOE directive goes on to say is inadequate, implying that it needs to be modified or overridden.

quote:

Now pay very careful attention, because part of the bankruptcy "reform" law in 2005 placed derivative claims in front of depositors in a business failure - including a bank failure.

What JP Morgan is claiming in the MF Global case is that the derivative trade (which is exactly what a "Repo to Maturity" trade is - it's a derivative) is entitled to preference in the case of MF Global over those who had cash there for safekeeping either as a margin deposit or just as free cash as you would hold free cash in a bank.

If a major bank blows up this very same claim, supported in existing Bankruptcy Law with the changes signed by George Bush in 2005, will be used to steal the entirety of your bank account, and if you detect the impending blowup shortly before it happens -- say, 90 days before -- you're still exposed to the risk through clawback!

I have often referenced how that "reform" law in 2005 was used to screw you blind as a consumer, all under the name of the "ownership society" and "responsibility." The truth is that this "reform" law was a raw example of financial******that was intended to and did assault you, the common consumer in America, for the explicit purpose of benefiting large financial institutions.

Don't run any crap about FDIC insurance in this sort of event either -- in the singular case of Bank of America we're talking about $77 trillion in face value of derivatives. While "notional" values are wildly beyond what anyone would have to pay (as that figure assumes the reference all goes to a literal value of zero) the fact remains that with even a 5% loss the amount of money required would be roughly equal to the entire US Federal Budget, which the FDIC clearly does not have -- nor could it acquire.

quote:

An efficient path for returning the sound operations of the G-SIFI to the private sector would be provided by exchanging or converting a sufficient amount of the unsecured debt from the original creditors of the failed company [meaning the depositors] into equity [or stock]. In the U.S., the new equity would become capital in one or more newly formed operating entities. In the U.K., the same approach could be used, or the equity could be used to recapitalize the failing financial company itself—thus, the highest layer of surviving bailed-in creditors would become the owners of the resolved firm. In either country, the new equity holders would take on the corresponding risk of being shareholders in a financial institution.

quote:

ORIGINAL: YN

Yes, Ellen Brown certainly doesn't know as much as a Tory does.

And since she cites this fictitious document from the fraudsters at the United States FDIC which purports to be a joint paper by the FDIC and the BOE . . .

quote:

An efficient path for returning the sound operations of the G-SIFI to the private sector would be provided by exchanging or converting a sufficient amount of the unsecured debt from the original creditors of the failed company [meaning the depositors] into equity [or stock]. In the U.S., the new equity would become capital in one or more newly formed operating entities. In the U.K., the same approach could be used, or the equity could be used to recapitalize the failing financial company itself—thus, the highest layer of surviving bailed-in creditors would become the owners of the resolved firm. In either country, the new equity holders would take on the corresponding risk of being shareholders in a financial institution.

quote:

ORIGINAL: YN

Of course you are a Tory, be proud of what you are.

quote:

ORIGINAL: YN

Canada appears to plan the same thing.

quote:

ORIGINAL: Politesub53

Get back to me with something substantive, not speculative.

Edited for spelling.

quote:

Most controversially, the Resolution and Recovery Directive will contain a power for the regulators to require a “bail-in”. This is a power to require creditors of a bank to convert their debt into shares of the bank or to write it off. Negotiations on the precise scope of the bail-in power are continuing, with outstanding questions including whether or not it should apply to senior debt or depositors who have or who do not have the benefit of deposit guarantee schemes. Clearly, however, the bail-in power will apply to junior or subordinated debt securities, whether or not those securities contain an express power on the part of the issuer to require conversion into shares (some securities issued since 2008, such as so called “CoCos”, contain an express power, but this is by no means universal).

quote:

ORIGINAL: YN

The Tory doesn't even know what goes on in his own kingdom but regularly lectures the Yankees on how to run their country -

quote:

Most controversially, the Resolution and Recovery Directive will contain a power for the regulators to require a “bail-in”. This is a power to require creditors of a bank to convert their debt into shares of the bank or to write it off. Negotiations on the precise scope of the bail-in power are continuing, with outstanding questions including whether or not it should apply to senior debt or depositors who have or who do not have the benefit of deposit guarantee schemes. Clearly, however, the bail-in power will apply to junior or subordinated debt securities, whether or not those securities contain an express power on the part of the issuer to require conversion into shares (some securities issued since 2008, such as so called “CoCos”, contain an express power, but this is by no means universal).

The Co-operative Bank – first use of “bail-in” powers by the UK’s Prudential Regulation Authority – or not?

Australia appears to be the only part of the "Anglo-Saxon" banking system not engaged in or planning this new thievery.

quote:

(The table is broadly ordered by how strongly the country is in favour of uninsured depositor preference and how strongly against flexibility it is. Hence Spain which is strongly for depositor preference and little flexibility is near the top, while Sweden which barely favours a bail-in plan and wants significant flexibility is near the bottom

quote:

As you can see, there are some big splits remaining. The ECB, Spain, Portugal and France (amongst others) want a clear depositor preference regime – where uninsured depositors are the last to be written down. On the other hand, Germany, the Netherlands and the UK want more equality between senior bondholders and uninsured depositors. Going even further, there are Sweden, Poland and Denmark - which have already clearly defined national schemes which do not fit well with the EU plans for a bail-in hierarchy.

quote:

So far, they have not resolved the issues,