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Bail-Ins May “Undermine Confidence” In Banks – Bank of Italy

from Gold Core:

Bank ‘bail-ins’ and the new international bail-in regime that impose losses on bank investors, bondholders and even depositors may undermine the confidence of small savers in the banking system, a senior Bank of Italy official warned on Wednesday.

Protect Your Savings From The Wrecking Ball

“The bail-in can exacerbate – rather than alleviate – the risks of systemic instability caused by the crisis of individual banks,” Carmelo Barbagallo, head of supervision at the central bank, astutely noted during a hearing before the Chamber of Deputies in Italy according to Reuters:

“It can undermine confidence, which is the essence of banking; transfer the costs of the crisis from taxpayers at large to a smaller category of people no less worthy of protection – small investors, pensioners – who directly or indirectly invested in bank liabilities” said Barbagallo.

The comments are notable as they are the first time that a central bank official in the EU, and indeed, internationally has voiced concerns about the coming bail-in regime and the impacts on ordinary citizens – small businesses, investors, savers and pensioners.

Central bank supervisor, Barbagallo is an interesting character in that he does not appear to be your typical central banker – most of whom today seem to be career bankers with Goldman Sachs and other Wall Street or City of London bankers. Indeed, his background is as a worker who rose through the ranks to become a senior trade union official.

Read More @ GoldCore.com

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1 comment to Bail-Ins May “Undermine Confidence” In Banks – Bank of Italy

  • Ed_B

    “Bail-Ins May “Undermine Confidence” In Banks” – Bank of Italy

    Really? Just because a bank steals our money, considers us “unsecured creditors”, and generally participates in the looting of entire nations why would that undermine our confidence in them?

    /sarc/off

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