Global trend sparked by Cyprus' confiscation of accounts balances
WND
NEW YORK – Can the federal government confiscate all the deposits in an American citizen’s FDIC-insured bank account?
The answer is “Yes.”
As WND reported, the Dodd-Frank bill allows the federal government to confiscate bank deposits in an unlimited “bail-in” for banks “too big to fail,” provided the account holder gets equity in exchange for the deposits.
In March, Cyprus agreed to confiscate 10 percent of all deposits in Cypriot banks, calculated to result in a 10 billion euro “bail-in” as a condition of obtaining an emergency Eurozone bail-out of 10 billion euros.
The question increasingly getting asked in international banking circles is this: Was the “Cyprus Experiment” in which the government confiscated bank deposits a first step toward what may well become a global trend over the next few years?
EU proposes deposit grab
Anyone who thinks the scenario is merely academic must realize that the European Parliament already is in the process of passing new regulations adopting the recommendation of its Economic and Monetary Affairs Committee. The panel recommends that a deposit guarantee funds should not protect a deposit of funds in a “guaranteed account” can be siezed when financial difficulties call for rescuing a troubled financial institution.
The text of the EU’s Economic and Monetary Affairs Committee recommendation calls for ruling out using deposits below 100,000 euros and specifies that confiscating deposits above 100,000 euros should be a last resort.
A European Parliament press release dated May 21 specified the “bail-in” scheme proposed by the EU’s Economic and Monetary Affairs Committee should be up and running by January 2016.
With the EU moving to codify procedures for confiscating depositor funds in a bank “bail-in,” the confiscation of deposits last March in the Mediterranean island nation of Cyprus may have only been a dry run for future bank crises anticipated by EU financial experts.
Reposted with permission.
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