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Old 03-28-2013, 01:54 AM   #1
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Canada Includes Cyprus like Haircut/Default Bail-In Provision For Banks in 2013 Budget

SD has been alerted to an alarming provision that has been buried deep inside the official 2013 Canadian Budget that will result in depositor haircut bail-ins jumping to this side of the pond during the next bank crisis!

Titled ECONOMIC ACTION PLAN 2013 and tabled in the House of Commons by Minster of Finance James Flaherty on March 21st, the official 2013 Canadian budget contains an explicit provision that Canada will pursue the bail-in model for systemically important banks for future bank failures!
Depositor haircuts have just jumped to this side of the pond, effective the next bank crisis/ failure:

From Page 144:

“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.”

Translated, Without the use of taxpayer funds means via depositor funds.

And the meat of the provision, from Page 145:

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…

Confiscating wealth from depositors will reduce risks for taxpayers??? Only those with 100% of their assets in physical gold and silver, or those Canadian depositors who are somehow not also taxpayers perhaps!

The bail-in provision in Canada’s 2013 budget can be found on pages 144,145:

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Old 03-28-2013, 07:18 AM   #2
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Gambling is awesome fun when you get to do it with other people's money. Banks and financial institutions no longer have any fiduciary responsibility. Caveat emptor!
The journey of a thousand miles begins with a single step. - Lao Tzu

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Old 03-28-2013, 07:51 AM   #3
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I for one think it is a step in the right direction, although as usually, they approach the real problem, from asshole side - just as you would expecting from corrupted idiot politicians, and their clever, but equally corrupted buddies banksters:

What is the root problem?
  1. Fractional reserve banking, making bank runs even POSSIBLE, (and systematically - inevitable, in the long run), is the source of all evil - eventually, if run unchecked for long enough, leads to:
  2. Wide spread bank runs (as we have seen in history). To prevent them, governments collude with banks to create all kinds of Central Banks and deposit "insurance" schemes (that of course are wholly inadequate), that in turn gives savers a false sense of security, allowing the confidence game to progress to the stage two (and prevent people from doing their due diligence, when assessing risks of giving their money, to a particular bank, also often creates moral hazards and gives unfair competitive advantage, in case of TBTFs - "they are going to get bailed out, anyway, if SHTF" - is the common man on the street thinking - and quite rightly so) - instead of just FORBIDDING FRACTIONAL RESERVE BANKING, make it illegal in the first place, and cut the problem at it's knees
  3. if pt. 2 above is left run unchecked for long enough (here we are, today), it eventually leads to such a big cracks in the system, that even the (previously working) confidence boosters of Central Banks and government "deposit guarantees" (wait a second, I thought that government(s) around the globe, don't have two fucking spare cents to rub together left in their piggies, they run permanent deficits since forever, and are BORROWING money even to finance their daily operations, with ever-widening deficits, so how the fuck any sane person with two living braincells could believe for a fraction of a second, that they can "guarantee" anything financially, for fuck's sake???) simply are not enough, to cover up the depth of underlying shithole, and here we are today:
  4. "Yes, we do not back up from our 'deposit guarantees', but you know what, if your bank gets insolvent, we won't pay you back what we have previously 'guaranteed'". What an idiotic, roundabout, insanely complex and backwards way of simply recognizing THE REALITY - but hey, at least it is some way of RECOGNIZING THE REALITY: "there's no fucking way, that we can guarantee anything, so better watch what happens to YOUR money, and act accordingly". So, it seems that today, we are squarely back in between of points 1) and 2) above. What comes next? Point 2) in full swing - bank runs, capital flights, capital controls, and so on.

Bank runs to follow. Reality to overcome yet again, as it always will, because you know, it is what it is, a REALITY...

Knowing all that shit, wouldn't it be just so much SIMPLER and sane thing to do, to get back for a second, try to figure out the root problem, and just OUTLAW the fucking "fictional" reserve banking, in the first place, and recognize the reality, that money does not grow on trees, and governments can only "guarantee" so much, as much they take away from US all (eventually, one way or another), so basically, nothing that WE couldn't finance ourselves, if left alone to our own measures?

But I am not holding my breath, to see this implemented... Not until there is an utter desperation, and blood on the streets - and even then, God knows who is going to win, after all. The Powers That Be, are by definition, very powerful...

here's a good analysis (with numbers charts and what not) of New Zealand's OBR (which is substantially the same)
“...the issue which has swept down the centuries and will have to be fought sooner or later is the People versus the Banks.
Lord Acton

Last edited by bushi; 03-28-2013 at 08:29 AM.
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