Can You Trust Your Bank In A Crisis?

Banking is a game of confidence, in that if fears of a potential bank collapse arise, then naturally people who hold money at that institution will try to grab their cash, and run. The Global Financial Crisis, where many banks were saved by the use of public funds.

But this means taxpayers are on the hook, and so post the GFC, there were attempts to develop alternatives which would transfer risks from the tax-payers to other parties, including shareholders bond holders and even depositors of an affected bank. The so called bank resolution – or living will – includes the deposit bail-in regimes which were proposed (initially by merchant bankers by the way) and adopted by the G20 to allow deposits held at banks to be grabbed and converted to equity. This happened of course in Greece a few years later.

In the IMF Global Stability Report from October 2023, there was a section which highlighted that the March 2023 bank runs in Switzerland and the United States were unusually large and fast with their speed and size facilitated by rapid online deposit withdrawals and the rapid spread of worries among important groups of depositors via social media and other digital channels.

I am often asked if bail-in is a real risk to savers, and my reply remains the same. It’s a theoretical risk for sure, thanks to the likes of the IMF and others, but practically, its unlikely to be activated because the collateral damage would be enormous. But understand that those bankers who dreamed up bail-in and the QANGO’s who are pushing it, are still pushing Governments to give the financial regulators ever more power, never mind democracy. Its a cautionary tale of who is actually calling the shots, and the risks to democracy are real.

http://www.martinnorth.com/

Go to the Walk The World Universe at https://walktheworld.com.au/

Digital Finance Analytics (DFA) Blog
Digital Finance Analytics (DFA) Blog
Can You Trust Your Bank In A Crisis?
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Can You Trust Your Bank In A Crisis?

Banking is a game of confidence, in that if fears of a potential bank collapse arise, then naturally people who hold money at that institution will try to grab their cash, and run. The Global Financial Crisis, where many banks were saved by the use of public funds.

But this means taxpayers are on the hook, and so post the GFC, there were attempts to develop alternatives which would transfer risks from the tax-payers to other parties, including shareholders bond holders and even depositors of an affected bank. The so called bank resolution – or living will – includes the deposit bail-in regimes which were proposed (initially by merchant bankers by the way) and adopted by the G20 to allow deposits held at banks to be grabbed and converted to equity. This happened of course in Greece a few years later.

In the IMF Global Stability Report from October 2023, there was a section which highlighted that the March 2023 bank runs in Switzerland and the United States were unusually large and fast with their speed and size facilitated by rapid online deposit withdrawals and the rapid spread of worries among important groups of depositors via social media and other digital channels.

I am often asked if bail-in is a real risk to savers, and my reply remains the same. It’s a theoretical risk for sure, thanks to the likes of the IMF and others, but practically, its unlikely to be activated because the collateral damage would be enormous. But understand that those bankers who dreamed up bail-in and the QANGO’s who are pushing it, are still pushing Governments to give the financial regulators ever more power, never mind democracy. Its a cautionary tale of who is actually calling the shots, and the risks to democracy are real.

http://www.martinnorth.com/

Go to the Walk The World Universe at https://walktheworld.com.au/

Deposit Safety Is A Matter Of Confidence

Last week the Bank of England Governor raised the prospect of changes to the Deposit Insurance schemes which exists in many Western Economies. So we look at what he said, and consider the relative security of deposits in the banking system, in the light of recent failures, and Central Bank interventions.

For more on Deposit Bail-In see my recent posts here:

Is Deposit Bail-In A Thing In Australia? https://youtu.be/B8OC2izjKuA

Deposit Bail-In: Who’s Fact-checking The Fact-checkers? With Robbie Barwick https://youtu.be/CAXprMwMnyY

The Deposit Bail In Question… https://youtu.be/n8t-78n1Lrs

http://www.martinnorth.com/

Go to the Walk The World Universe at https://walktheworld.com.au/

The Guardians Of Your Super Say “Nothing To See Here”! [Podcast]

I discuss a recent RBA release about correspondence between the Treasurer and RBA about risks from derivatives. While the focus of the letters is superannuation, there are wider issues at play here, as I explore with Robbie Barwick from the Citizens Party.

https://citizensparty.org.au/

Go to the Walk The World Universe at https://walktheworld.com.au/

Digital Finance Analytics (DFA) Blog
Digital Finance Analytics (DFA) Blog
The Guardians Of Your Super Say “Nothing To See Here”! [Podcast]
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The Guardians Of Your Super Say “Nothing To See Here”!

I discuss a recent RBA release about correspondence between the Treasurer and RBA about risks from derivatives. While the focus of the letters is superannuation, there are wider issues at play here, as I explore with Robbie Barwick from the Citizens Party.

https://citizensparty.org.au/

Go to the Walk The World Universe at https://walktheworld.com.au/

Deposit Bail-In: Who’s Fact-checking The Fact-checkers? With Robbie Barwick

Robbie Barwick from the Citizens Party and I discuss an AAP “Fact-check” on Deposit Bail-in.

They did miss point.

Go to the Walk The World Universe at https://walktheworld.com.au/

So Bank Deposit Robbery IS Legal!

We look at the recent EU ruling which confirms that Bank Deposit Bail-In is totally legal. Why am I not surprised?

https://cyprus-mail.com/2021/10/20/crucial-decision-on-2013-banking-crisis-on-hold/
https://nomadcapitalist.com/finance/offshore/your-bank-account-is-no-longer-sacrosanct/
https://www.rbnz.govt.nz/regulation-and-supervision/banks/open-bank-resolution

Go to the Walk The World Universe at https://walktheworld.com.au/

Are Bank Deposits Safer In Australia Or New Zealand?

I am joined by Robbie Barwick from The Citizens Party as we discuss the latest Deposit Bail-In issues, prompted by a New Zealand Government paper which proposes to change the current “Open Banking Resolution” Bail-In approach.

We explore the underlying drivers of this approach, and alternatives which provide a better solution.

Links:

https://committees.parliament.uk/publications/6725/documents/71894/default/

https://www.treasury.govt.nz/system/files/2021-04/rbnz-dtb-DEV-21-SUB-0079-4426957.pdf

https://citizensparty.org.au/media-releases/nz-law-will-bail-deposits-australian-banks

Go to the Walk The World Universe at https://walktheworld.com.au/

Its Deposit Bail-In “D” Day! [Podcast]

Robbie Barwick and I discuss the upcoming Senate vote on passing the amendment to secure bank deposits in Australia.

Details of the Bill: https://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Economics/BankingDeposits

List of members: https://www.aph.gov.au/Senators_and_Members – .

Anthony Albanese Electorate: (02) 9564 3588 Canberra: (02) 6277 4022 A.Albanese.MP@aph.gov.au
Richard Marles Electorate: (03) 5221 3033 Canberra: (02) 6277 4330 Richard.Marles.MP@aph.gov.au
Stephen Jones: Electorate: (02) 4297 2285 Canberra: (02) 6277 4661 Stephen.Jones.MP@aph.gov.au

Go to the Walk The World Universe at https://walktheworld.com.au/

Digital Finance Analytics (DFA) Blog
Digital Finance Analytics (DFA) Blog
Its Deposit Bail-In "D" Day! [Podcast]
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