Have you taken the six steps, or are you still waiting, hoping and then losing your deposits?
http://www.jsmineset.com/2013/06/20/in-the-news-today-1574/
Jim Sinclair’s Commentary
Have you taken the six steps, or are you still waiting, hoping and then losing your deposits?
Don’t bank on your savings being safe
June 20, 2013
Remember the Cyprus banking crisis in March when their cash-strapped government appropriated money from bank savings accounts? ”Thank goodness it can’t happen here,” we smugly told ourselves. But it can, and it has.
Last December, the federal government rushed legislation through Parliament that meant banks had to transfer depositors’ money to the Australian Securities and Investments Commission from any accounts that were deemed ”inactive” for three years, down from seven years previously.
Our own cash-strapped government expected to raise $109 million from these accounts in this financial year.
When I read about a Queensland pensioner who’d had $22,000 taken from his savings I thought I’d better check the account my superannuation fund has had since 2009 with BankWest in Perth.
This account was a Business TeleNet Saver account – an online savings account that earned a small but useful rate of interest while the funds stayed safely tucked away. Or so I thought.
When I logged in to check the balance, the account had disappeared and there was no sign of the $2200 I had deposited.
More…
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EU Won’t Fix Minimum Level of Eligible Bail-In Funds
By Dow Jones Business News, June 20, 2013, 01:35:00 PM EDT
LUXEMBOURG–Europe’s biggest banks won’t have to set aside a fixed level of liabilities that could be quickly "bailed in" if they run into trouble, according to the latest draft of a key banking law due to be decided on by European Union finance ministers Friday.
The change reflects "strong opposition" from many member states to the plan, as well as "substantial difficulties and risks involved in setting a minimum "one-size-fits-all’" level across the region, according to the document, seen Thursday by The Wall Street Journal.
Instead, national resolution authorities will determine the minimum level of eligible bail-in liabilities for systemically important banks on a case-by-case basis, based on their business model, level of risk and loss absorbing capacity, the document said.
The issue is a key part of a new law for dealing with troubled banks, known as the bank recovery and resolution directive, which will be discussed by EU finance ministers in Luxembourg Friday.
The rules aim to force banks’ shareholders, creditors and sometimes depositors to share losses when banks fail, as part of a broader effort to prevent banking crises from bankrupting governments, as happened in Ireland and Cyprus.
More…
==========================================================
Germany Said to Seek Cyprus-Style Wipeouts in ESM Bank Aid Rules
By Rebecca Christie and Radoslav Tomek
June 20, 2013
Germany is leading a push for all bank creditors except insured depositors to take losses before the euro area’s firewall fund could provide direct aid to troubled financial institutions, according to two European officials.
Euro-area finance ministers meeting in Luxembourg today are battling over what losses to require for private-sector creditors, particularly while the European Union sets up broader rules on how to restructure failing banks. The ministers are trying to agree on an outline for how banks can tap the 500 billion-euro ($660 billion) European Stability Mechanism without damaging their nation’s balance sheets.
Germany, Finland and the Netherlands want to require senior creditors to take losses before ESM aid could be considered, according to the two officials. This contrasts with the European Commission’s view that only junior bondholders and shareholders should be written down before state-funded restructuring can begin.
If the German effort is successful, it would mean that future bank bailouts within the currency zone would look more like the rescue terms for Cyprus, rather than the path taken by Ireland, Spain and the Netherlands. The debate shows that euro-area ministers remain divided over how to break the link between banking-sector and sovereign-debt struggles a year after they offered the prospect of direct ESM aid to calm market fears.
More…
Jim Sinclair’s Commentary
Have you taken the six steps, or are you still waiting, hoping and then losing your deposits?
Don’t bank on your savings being safe
June 20, 2013
Remember the Cyprus banking crisis in March when their cash-strapped government appropriated money from bank savings accounts? ”Thank goodness it can’t happen here,” we smugly told ourselves. But it can, and it has.
Last December, the federal government rushed legislation through Parliament that meant banks had to transfer depositors’ money to the Australian Securities and Investments Commission from any accounts that were deemed ”inactive” for three years, down from seven years previously.
Our own cash-strapped government expected to raise $109 million from these accounts in this financial year.
When I read about a Queensland pensioner who’d had $22,000 taken from his savings I thought I’d better check the account my superannuation fund has had since 2009 with BankWest in Perth.
This account was a Business TeleNet Saver account – an online savings account that earned a small but useful rate of interest while the funds stayed safely tucked away. Or so I thought.
When I logged in to check the balance, the account had disappeared and there was no sign of the $2200 I had deposited.
More…
===========================================================
EU Won’t Fix Minimum Level of Eligible Bail-In Funds
By Dow Jones Business News, June 20, 2013, 01:35:00 PM EDT
LUXEMBOURG–Europe’s biggest banks won’t have to set aside a fixed level of liabilities that could be quickly "bailed in" if they run into trouble, according to the latest draft of a key banking law due to be decided on by European Union finance ministers Friday.
The change reflects "strong opposition" from many member states to the plan, as well as "substantial difficulties and risks involved in setting a minimum "one-size-fits-all’" level across the region, according to the document, seen Thursday by The Wall Street Journal.
Instead, national resolution authorities will determine the minimum level of eligible bail-in liabilities for systemically important banks on a case-by-case basis, based on their business model, level of risk and loss absorbing capacity, the document said.
The issue is a key part of a new law for dealing with troubled banks, known as the bank recovery and resolution directive, which will be discussed by EU finance ministers in Luxembourg Friday.
The rules aim to force banks’ shareholders, creditors and sometimes depositors to share losses when banks fail, as part of a broader effort to prevent banking crises from bankrupting governments, as happened in Ireland and Cyprus.
More…
==========================================================
Germany Said to Seek Cyprus-Style Wipeouts in ESM Bank Aid Rules
By Rebecca Christie and Radoslav Tomek
June 20, 2013
Germany is leading a push for all bank creditors except insured depositors to take losses before the euro area’s firewall fund could provide direct aid to troubled financial institutions, according to two European officials.
Euro-area finance ministers meeting in Luxembourg today are battling over what losses to require for private-sector creditors, particularly while the European Union sets up broader rules on how to restructure failing banks. The ministers are trying to agree on an outline for how banks can tap the 500 billion-euro ($660 billion) European Stability Mechanism without damaging their nation’s balance sheets.
Germany, Finland and the Netherlands want to require senior creditors to take losses before ESM aid could be considered, according to the two officials. This contrasts with the European Commission’s view that only junior bondholders and shareholders should be written down before state-funded restructuring can begin.
If the German effort is successful, it would mean that future bank bailouts within the currency zone would look more like the rescue terms for Cyprus, rather than the path taken by Ireland, Spain and the Netherlands. The debate shows that euro-area ministers remain divided over how to break the link between banking-sector and sovereign-debt struggles a year after they offered the prospect of direct ESM aid to calm market fears.
More…