The Phaserl


Bail-out Is Out, Bail-in Is In: Another Argument for Publicly-Owned Banks

“[W]ith Cyprus . . . the game itself changed. By raiding the depositors’ accounts, a major central bank has gone where they would not previously have dared. The Rubicon has been crossed.”

—Eric Sprott, Shree Kargutkar, “Caveat Depositor

by Ellen Brown, Washington’s Blog:

The crossing of the Rubicon into the confiscation of depositor funds was not a one-off emergency measure limited to Cyprus.  Similar “bail-in” policies are now appearing in multiple countries.  (See my earlier articles here.)  What triggered the new rules may have been a series of game-changing events including the refusal of Iceland to bail out its banks and their depositors; Bank of America’s commingling of its ominously risky derivatives arm with its depository arm over the objections of the FDIC; and the fact that most EU banks are now insolvent.  A crisis in a major nation such as Spain or Italy could lead to a chain of defaults beyond anyone’s control, and beyond the ability of federal deposit insurance schemes to reimburse depositors.

The new rules for keeping the too-big-to-fail banks alive: use creditor funds, including uninsured deposits, to recapitalize failing banks.

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1 comment to Bail-out Is Out, Bail-in Is In: Another Argument for Publicly-Owned Banks

  • NaySayer

    The bail-ins are a reason for publicly owned banks? How is that different in the real world from what we have now? The banks are for all intents and purposes branches of the government or as it is probably more accurate to say, the government is just a department of the big banks.

    The bail ins are the reason for owning real commodity money in your own possession, not a reason for public banks that won’t be any better than what we have now.

    What we need are vault companies with integrity who won’t steal your money and lease it out behind your back and then when you try to go get it, tell you NO, you can’t have your own property because they stole it and it is gone like Dutch Amro. A vault company with integrity and good security with worldwide locations who will ship it securely to wherever you happen to be is what is needed.

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