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Governments stealing from bank accounts
'Bail-ins' taking depositors' money could be headed to U.S.
WND
F. Michael Maloof
9/26/2013
Excerpt:
WASHINGTON – The questionable practice of “bail-ins” begun by Cyprus a year ago to keep banks solvent is beginning to spread to other nations, and holders of large deposits are starting to see their balances plunge literally overnight.
A “bail-in,” as opposed to a bailout that countries especially in Europe have been seeking from the International Monetary Fund and the European Union, is a recognition that such outside monetary injections won’t be forthcoming.
Consequently, banks have been seeking money from another source – their large depositors. The funds are simply taken and applied to a bank’s recapitalization in lieu of government bailouts.
The practice essentially is a transfer from a personal savings account to the bank’s operating account, without the customers’ permission or even any notice.
The example set in Cyprus when the island nation confronted its financial crisis now is spreading to such other countries as Italy, Poland, New Zealand and now Canada.
Financial experts agree that the practice soon could spread to the United States.
The “bail-in” a year ago in Cyprus developed after the island nation was refused further outside financing from the IMF and the European Central Bank of the EU, of which the Mediterranean island is a member.
Cyprus never was looked upon as a place to spend money. Instead, it was seen more as a place to safely hide large deposits of cash for private individuals and companies not only in Europe and Russia but for major shareholders and top executives from all over the world.
Hiding huge sums of cash was made easy in Cyprus with such mechanisms as outright bank deposits, shell companies and holding companies, with massive transfers taking place between them.
“Cyprus was a leader – in some circles and for some applications, the leader – in quiet storage, management and structuring of exceptionally large sums for private individuals and corporations all over the world,” financial expert Franklin Raff wrote in a March 2013 WND article.
“Cypriots were fast learners in the fields of global asset protection and ‘tax optimization,’” Raff said. “Cyprus’ 2004 entrance into the E.U. gave financial operations a deeper veneer of legitimacy and security.
“All of this meant almost a decade of rapidly expanding business,” he said. “This was surely from Europeans and Russians wary of unpredictable tax laws and indiscriminate, extralegal confiscations, but also from entities in North America and elsewhere.”
Because a long line of EU banks had been bailed out at major public expense during the 2008-2009 financial crisis, the EU decided to turn down two of Cyprus’ major banks, Laiki and the Bank of Cyprus, for similar help.
In an effort to save the Cypriot economy from collapse, the government passed a law that took some 4.3 billion euros in deposits belonging to some 14,000 depositors just in the Laiki bank alone, leaving each depositor with no more than 100,000 euros, the limit on deposit insurance under EU regulations.
Ultimately, Laiki bank folded, with depositors’ diminished assets transferred to the Bank of Cyprus.
In an effort to recapitalize the Bank of Cyprus, Cypriot officials imposed a 47.5 percent loss on deposits exceeding the 100,000 euro limit, exchanging the seized deposits for shares in the bank.
Depositors in Cyprus lost an estimated total of 10.6 billion euros.
In viewing the recapitalization experience in Cyprus, financial experts say “bail-ins” are increasingly becoming accepted practice around the world due to the lack of any outside bailouts.
In jeopardy will be all private bank accounts and private pension funds.
Financial sources say that the government of Poland just “raided” private pension funds in an effort to reduce the size of the government debt.
According to a Reuters report, the Polish government will transfer to the state many of the assets held by private pension funds, slashing public debt but putting in doubt the future of the multi-billion-euro funds, much of which is foreign-owned.
“The Polish government is doing the best that it can to make this sound like some sort of complicated legal maneuver, but the truth is that what they have done is stolen private assets without giving any compensation in return,” said financial expert Michael Snyder writing for the Financial Collapse blog.
Now, finance ministers in the EU are undertaking a similar approach.
They have approved a plan to force bondholders and shareholders to finance future bank failures before going to taxpayers for bailouts.
.............................................
View the complete article at:
http://www.wnd.com/2013/09/governmen...ings-accounts/
'Bail-ins' taking depositors' money could be headed to U.S.
WND
F. Michael Maloof
9/26/2013
Excerpt:
WASHINGTON – The questionable practice of “bail-ins” begun by Cyprus a year ago to keep banks solvent is beginning to spread to other nations, and holders of large deposits are starting to see their balances plunge literally overnight.
A “bail-in,” as opposed to a bailout that countries especially in Europe have been seeking from the International Monetary Fund and the European Union, is a recognition that such outside monetary injections won’t be forthcoming.
Consequently, banks have been seeking money from another source – their large depositors. The funds are simply taken and applied to a bank’s recapitalization in lieu of government bailouts.
The practice essentially is a transfer from a personal savings account to the bank’s operating account, without the customers’ permission or even any notice.
The example set in Cyprus when the island nation confronted its financial crisis now is spreading to such other countries as Italy, Poland, New Zealand and now Canada.
Financial experts agree that the practice soon could spread to the United States.
The “bail-in” a year ago in Cyprus developed after the island nation was refused further outside financing from the IMF and the European Central Bank of the EU, of which the Mediterranean island is a member.
Cyprus never was looked upon as a place to spend money. Instead, it was seen more as a place to safely hide large deposits of cash for private individuals and companies not only in Europe and Russia but for major shareholders and top executives from all over the world.
Hiding huge sums of cash was made easy in Cyprus with such mechanisms as outright bank deposits, shell companies and holding companies, with massive transfers taking place between them.
“Cyprus was a leader – in some circles and for some applications, the leader – in quiet storage, management and structuring of exceptionally large sums for private individuals and corporations all over the world,” financial expert Franklin Raff wrote in a March 2013 WND article.
“Cypriots were fast learners in the fields of global asset protection and ‘tax optimization,’” Raff said. “Cyprus’ 2004 entrance into the E.U. gave financial operations a deeper veneer of legitimacy and security.
“All of this meant almost a decade of rapidly expanding business,” he said. “This was surely from Europeans and Russians wary of unpredictable tax laws and indiscriminate, extralegal confiscations, but also from entities in North America and elsewhere.”
Because a long line of EU banks had been bailed out at major public expense during the 2008-2009 financial crisis, the EU decided to turn down two of Cyprus’ major banks, Laiki and the Bank of Cyprus, for similar help.
In an effort to save the Cypriot economy from collapse, the government passed a law that took some 4.3 billion euros in deposits belonging to some 14,000 depositors just in the Laiki bank alone, leaving each depositor with no more than 100,000 euros, the limit on deposit insurance under EU regulations.
Ultimately, Laiki bank folded, with depositors’ diminished assets transferred to the Bank of Cyprus.
In an effort to recapitalize the Bank of Cyprus, Cypriot officials imposed a 47.5 percent loss on deposits exceeding the 100,000 euro limit, exchanging the seized deposits for shares in the bank.
Depositors in Cyprus lost an estimated total of 10.6 billion euros.
In viewing the recapitalization experience in Cyprus, financial experts say “bail-ins” are increasingly becoming accepted practice around the world due to the lack of any outside bailouts.
In jeopardy will be all private bank accounts and private pension funds.
Financial sources say that the government of Poland just “raided” private pension funds in an effort to reduce the size of the government debt.
According to a Reuters report, the Polish government will transfer to the state many of the assets held by private pension funds, slashing public debt but putting in doubt the future of the multi-billion-euro funds, much of which is foreign-owned.
“The Polish government is doing the best that it can to make this sound like some sort of complicated legal maneuver, but the truth is that what they have done is stolen private assets without giving any compensation in return,” said financial expert Michael Snyder writing for the Financial Collapse blog.
Now, finance ministers in the EU are undertaking a similar approach.
They have approved a plan to force bondholders and shareholders to finance future bank failures before going to taxpayers for bailouts.
.............................................
View the complete article at:
http://www.wnd.com/2013/09/governmen...ings-accounts/