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Thread: It's Official: Canadian Bank Depositors Are Now At Risk Of Bail-Ins

  1. Default It's Official: Canadian Bank Depositors Are Now At Risk Of Bail-Ins

    this is not new news but not good news came march 22 2016
    Earlier today, Canada's new Liberal government unveiled a stimulus budget meant to revive slumping growth with a surge in infrastructure spending and said it would run a deficit nearly three times larger than promised during last year's election.

    The government projected a C$29.4 billion ($22.5 billion) deficit for fiscal 2016-17 and gave no target date for returning to a balanced budget. This budget broke virtually all pledges the Liberals made before the election, including running just three years of deficits of up to C$10 billion before balancing the books by fiscal 2019-20.

    "We are seizing the opportunity to invest in people and the economy, and to prepare Canada for a brighter future," Finance Minister Bill Morneau said.

    What he is really seizing is the Bank of Canada money printer, because in order to monetize this surging deficit, the BOC will soon have to unleash its own QE in the coming months.

    As Reuters adds, because the Liberals command a majority in the Canadian Parliament's House of Commons, the budget is guaranteed to pass.

    Which is bad news not so much for the Canadian Dollar, which will certainly devalue in the coming months as the market prices in what a massive surge in deficit spending means although so will all other currencies as the global debasement race accelerates once more in a few short months, but for bank depositors, because deep inside the budget announcement, in the section discussing "tax fairness and a strong financial sector", we have official confirmation that Canada has just become the latest country to treat depositors as the bank creditors they are, and as such, they too will be impaired, or "bailed-in" the next time a Canadian bank needs to be rescued.
    Last edited by Shock_Treatment_Shawn; 01-12-2018 at 04:53 PM.
    Artificial Intelligence is not match for Natural Stupidity

  2. Default

    Warning: Trudeau has allowed banks to seize your money if economy fails


    WARNING: Did you see what Trudeau slipped into the federal budget?

    Did you see what Justin Trudeau slipped into the budget this week, hidden away on page 223?

    It’s called a bank “bail-in regime”.

    That means if a Canadian bank starts to fail, it would be allowed to seize your bank account to pay its bills. Seriously.

    It’s what they did in Cyprus three years ago, when bankers there made risky loans to Greece. In a back-room deal, politicians and bankers decided to pay off the bank debts by just seizing 10% of everyone’s deposits.
    Last edited by Shock_Treatment_Shawn; 01-12-2018 at 04:51 PM.
    Artificial Intelligence is not match for Natural Stupidity

  3. Default

    What is a “bail-in regime” and are my bank deposits safe?

    What is a bail-in regime?

    During the global financial crisis in 2007/2008, there was significant turmoil in the global financial system and a number of banks in other countries became financially distressed and either failed or received financial support from their governments so they could continue operating. Since then, there have been a series of new international banking rules put in place to help reduce the risk of another financial crisis occurring and to make banks stronger so that it is less likely that a bank would fail. One of the measures that countries around the world are implementing is a “bail-in regime”.

    Canada is joining this international effort by proposing a bail-in regime where certain long-term debt obligations of a large bank would be converted into equity in the unlikely event that the bank depleted its capital and was in danger of failing. This would be done so that bank shareholders and creditors would be responsible for recapitalizing a bank in financial difficulty rather than the government, taxpayers, or bank depositors.
    Some people have said that the bail-in regime would allow the government to seize the deposits of bank customers. We saw this happen in Cyprus a few years ago. Is that true?

    No. The government has made it very clear that bank customers’ deposits will not be part of the bail-in regime. In August 2016, the Department of Finance launched consultations to review the federal financial sector framework. In its consultation document, Supporting a Strong and Growing Economy: Positioning Canada’s Financial Sector for the Future (page 21), the government states that customer deposits will not be subject to the bail-in regime.
    Are there concerns that a bank in Canada would fail?

    Not at all, but it is always wise to take steps to make it even more unlikely that that would happen. Canada’s banks were well capitalized, well managed, and well regulated going into the global financial crisis, and remain so to this day.

    Being well capitalized allows banks to continue lending and provides a cushion against loan losses, which tend to increase during economic downturns.

    Following the global financial crisis, a series of global banking regulations were put into place to protect against the types of bank failures that we saw in other countries. Included in these global regulations are increased capital requirements. These robust capital requirements mean that banks have to have more capital on hand, further reducing the remote chance that a bank in Canada would fail.
    What is the federal government doing to put a bail-in regime in place for Canada?

    The government’s 2016 budget introduced a legislative framework for a bail-in regime for Canada’s domestic systemically important banks. This regime will protect Canadian taxpayers in the unlikely event of a large bank failure by reinforcing that bank shareholders and creditors are responsible for the bank’s risks. Regulations and guidelines setting out further features of the bail-in regime are currently being developed for consultation.
    Last edited by Shock_Treatment_Shawn; 01-12-2018 at 05:05 PM.
    Artificial Intelligence is not match for Natural Stupidity

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