Anticipating that the next banking crisis will require a bailout even a national government couldn't finance, plans are in place for directly taking depositor's money as was done in Cyprus.
Confiscating the customer deposits in Cyprus banks was not a one-off. It could happen here.
Confiscating the customer deposits in Cyprus banks, it seems, was not a one-off, ... A joint paper by the US Federal Deposit Insurance Corporation and the Bank of England dated December 10, 2012, shows that these plans have been long in the making; that they originated with the G20 Financial Stability Board in Basel, Switzerland (discussed earlier here); and that the result will be to deliver clear title to the banks of depositor funds.
Although few depositors realize it, legally the bank owns the depositor’s funds as soon as they are put in the bank. Our money becomes the bank’s, and we become unsecured creditors holding IOUs or promises to pay. (See here and here.) But until now the bank has been obligated to pay the money back on demand in the form of cash. Under the FDIC-BOE plan, our IOUs will be converted into “bank equity.”
The 15-page FDIC-BOE document ... begins by explaining that the 2008 banking crisis has made it clear that some other way besides taxpayer bailouts is needed to maintain “financial stability.” Evidently anticipating that the next financial collapse will be on a grander scale than either the taxpayers or Congress is willing to underwrite,...
No exception is indicated for “insured deposits” in the U.S., meaning those under $250,000, the deposits we thought were protected by FDIC insurance. This can hardly be an oversight, since it is the FDIC that is issuing the directive. [emphasis mine]
I was very disturbed when I heard the news report that said that the Cypriot government had the power to tap personal bank accounts to reconcile their debt. It sets a very dangerous precedent which could easily give rise to more runs on more banks if its legality is confirmed.
Who would have ever thought that the old saw about the money-stuffed mattress would come back into fashion?
Or the coffee can buried in the back lawn. That reminds me, I need to buy a metal detector.
Oh, Greg ... don't tell me you lost yours AGAIN?!? Tsk tsk tsk!
I'd like to open the podium up to the great George Carlin on the issue of bankers:
Interestingly that is being pushed by that model of the 'socially responsible' progressive state, the EU. While here in the US we have both the Dems and Repubs tripping over themselves to bring bailouts back to their districts.
Could they take money from your bank account? Sure. They already do in some circumstances and it probably would be justified as an 'emergency' measure (remember the PATRIOT act?) that simply becomes the norm.
They already have the 'tools' in place to enforce this. 'Money laundering' laws put restrictions on cash withdrawals and deposits, and simply having a lot cash around is justification for state seizure as 'suspected money laundering profits.'