Greater Phoenix Tea Party Patriots

Patriot Groups throughout the Maricopa and North Pinal County area.

Bank of England and FDIC Strategize on Saving their System by Crucifying You!

Glass-Steagall is the only solution to stop the banks from killing you!  What has taken place in Cyprus and Spain will be coming to a bank near you.  

Everyone needs to call their Representatives and Senators demanding that Glass-Steagall (HR 129: The Return to Prudent Banking Act of 2013 - http://larouchepac.com/glass-steagall ) be passed as soon as possible.

Read the following and weep! Or get angry and do something!  It is Glass-Steagall or Die! (http://LaRouchePac.com)
 
Bank of England and FDIC Strategize on Saving their System by Killing You!
by DennisSmall » Sat Mar 30, 2013 11:09 am
 
What? You don't know what a G-SIFI is? You will soon.
 
The Bank of England and the U.S. Federal Deposit Insurance Corporation jointly authored a paper published on Dec. 10, 2012, titled "Resolving Globally Active, Systemically Important, Financial Institutions." [ http://www.fdic.gov/about/srac/2012/gsifi.pdf ] Largely unnoticed at the time, it has gotten a lot of attention in the last 48 hours, since it was written up on March 28 by Ellen Brown, of Web of Debt, [ http://tinyurl.com/WebofDebt032813 ] as a plan to confiscate U.S. and U.K. bank {depositors} tobt bail out (or "bail in," as they call it) the major banks and their derivatives exposure, as the next crisis hits. More to the point, it is Cyprus , and related events, that have thrust this document front and center.
A quick read of the original 15-page document (see below for more details) indicates that the report is {deliberately vague} as to what they mean by the "unsecured creditors" who will take the hit, but as the Cyprus crisis unfolds, and as it is clearly being used as a "template" to the same everywhere else, the BoE/FDIC study comes into clearer focus as a trial balloon approach which outlines what they would like to get away with, if they can. The structure of the proposal is very much along the lines of what LaRouche forecast a couple of weeks ago as the Empire's plan to freeze everything, and issue "new money" to the select few.
The BoE/FDIC document becomes doubly significant in light of the fact that the policy it suggests is {already being implemented}:
* CYPRUS : The authorities today annunced that depositors over 100,000 euros are going to be hit much harder than the 40% write-down originally discussed. 37.5% of their holdings will be forcibly converted into common stock in the Bank of Cyprus ("congratulations; you are now a proud owner of a bankrupt bank")--but that's the good part. Of the remainder, 22.5% of their deposits won't even earn interest, let alone be returned; and 40% will accrue interest, but also won't be returned, unless "the bank does well" (good luck).
* EU: Both Dijsselbloem and Klass Knott have been clear that this policy is in fact the "template" for the rest of the region.
Now Swiss MEP Gunnar Hokmark has added: "You need to be able to do the bail-in as well with deposits," according to Reuters. The Greek blog Hellasfrappe reports that the Euro Parliament will soon be voting this into law. (see ZZZ)
* SPAIN : The "preferentes" swindle of duping depositors to "voluntarily" hand over their money in exchange for worthless common stock, was made effective this week with the announcement of the final bankruptcy plan for Bankia and other banks. Spanish blogs are also reporting (to be confirmed) that the government has changed the Constitution to allow a forced "tax" to be imposed on all depositors--which sounds a lot like Cyprus-style
confiscation. Santander UK has also just informed its depositors, according to the blog Slog, that their money will now be held in its capacity as a bank, and not as a trustee, ie that they can attack it (see ZZZ--also needs to be confirmed).
* CANADA : Hellasfrappe also reports that Canada 's "Economic Action Plan 2013", on pp 144-145, says that banks can be recapitalized by converting certain liabilities (deposits?) into regulatory capital. (ZZZ) [dns]
 
 
The Highlights of the Bank of England/FDIC Paper
 
There are four key points for our purposes:
1) "Unsecured creditors" are to be hit up to bail out G-SIFIs (Globally Active, Systemically Important Financial Institutions), so that taxpayers are not made to pay this time around (isn't that weet?). What is meant by "unsecured creditors" is left intentionally vague; and as a March 29 posting on the blog "Random Thoughts" puts it: "The $64 trillion question is who are the `unsecured creditors'? If they are depositors over the guaranteed limits, expect corporations and individuals to park their money elsewhere."
2) The proposed "top-down" resolution (ie bankruptcy reorganization) of G-SIFIs, by a combined UK/US approach, will lead to smaller, but possibly more profitable, financial
institutions. Ring-fencing in the U.K. will be very helpful to bring this about, they say. The assert--absurdly--that this will prevent the derivatives bubble from blowing up in their face.
3) The Bank of England takes over regulatory authority of all banking in the U.K. from the FSA, this coming Monday, April 1, 2013. Under the existing Banking Act, the FSA does not cover "nondeposit-taking financial firms, notably investment banks and financial market infrastructures." As of Monday, the FSB will--extremely important if this policy is to go opertional.
4) The BoE/FDIC say that this study is just the first step, and that they will have detailed plans in place for {each} G-SIFI by the end of 2013.
 
Now some quotes on each of these points:
1) "The unsecured debt holders can expect that their claims would be writetn down to reflect any losses that shareholders cannot cover, with some converted partly into equity in order to provide sufficient capital to return the sound business of the G-SIFI to private sector operations... In all likelihood, shareholders would lose all value and unsecured creditors should thus expect that their claims would be written down to reflect any losses that shareholders did not cover... The new equity holders would take on the corresponding risk of being shareholders in a financial institution." "Under a top-down resolution, shareholders and certain creditors at the top of the group absorb losses and recapitalize
the group as a whole. For a top-down approach to work, there must be sufficient loss-absorbing capacity available at the top of the group to absorb losses sustained within operational subsidiaries."Paragraph 47 is particularly ambiguous: "Retail or corporate 
depositors should not have an incentive to `run' from the firm under resolution insofar as their banking arrangements, transacted at the operating company level, remain unaffected."
 
2) "The resulting new private sector operations would be smaller, more mangeable--and perhaps more profitable...Ringfencing of a banking group's retail banking activities from
the group's investment banking activities would prove particularly valuable in facilitating such a restructuring... The newly resolved group would be solvent and viable, and should be in a position therefore to access market funding or, if necessary, funding from the authorities as discussed above... The contingency plans are designed to minimize the triggering of cross-defaults or closeout of netting arrangements at the operating companies."
 
3) "Once the Financial Services Bill comes into force in 2013, the Financial Services Authority will be replaced by two new regulatory bodies, the PRA and the Financial Conduct Authority. The PRA, a subsidiary of the Bank of England, will become the prudential regulator of deposit takers, insurers, and the largest investment firms."
"In both the U.S. and the U.K. , legislative reforms already made [i.e. Dodd-Frank--ed.] or planned in response to the financial crisis provide new powers for resolving failed or
failing G-SIFIs... to impose losses on shareholders and unsecured creditors--not on taxpayers.
 
4) "The strategies will be translated into detailed resolution plans for each firm during the first half of 2013...Subsequently, firm-specific resolvability assessments will be
developed by the end of 2013.
 
Glass-Steagall or Die! http://larouchepac.com/node/25513
The list of G-SIBs (Global Systemically Important Banks) provided by the Boe/FDIC document are:
Citigroup
Detsche Bank
HSBC
JP Morgan Chase
Barclays
BNP Paribas
Bank of America
Bank of New York Mellon
Credit Suisse
Goldman Sachs
Mitsubishi
Morgan Stanley
Royal Bank of Scotland
UBS
Bank of China
BBVA
Groupe BPCE
Groupe Credit Agricole
ING Bank
Mizuho FG
Nordea
Santander
Societe Generale
Standard Chartered
State Street
Sumitomo Mitsui
Unicredit Group
Wells Fargo 

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