The G20 meeting lately in Australia is to impose new rules for banking sector for the next financial disaster. The financial change suggests that these new guidelines will allow financial institutions to take cash from depositors and pensioners worldwide. There was no agreement, and the legislature didn’t accept to all this. They use terms so that it’s not apparent to tell what they have done, but what they did was say, generally, that we, the federal authorities, are not going to be accountable for bailing out the big financial institutions. These are about 30 international banks. So, you are going to have to avoid wasting yourselves, and the way you are going to have to do it is by bailing in the cash of your lenders. The biggest type of lenders of any financial institution is the depositors.
During the next financial problems, any ‘money’ that you and I have secured will be ‘bailed-in’ after the financial crisis. And if you think that your hard earned savings are secured with your financial institution account’s FDIC support, think again.
During the latest G20 meeting (mid-November), the participant countries made the decision that your deposits remain will become the property of the bank if an emergency takes it down. This indicates that the financial institution will be able to pay off their lenders first and the cash will no more be yours. The new guidelines generally change the position for you as a depositor (of your money) to that of a trader secured. And as with any trader in trading stocks, you will be the topic of dropping your hard earned cash.
The guidelines have completely changed, such as; essentially the depositors are now accountable for bailing-in financial institutions for any failures during financial problems. Such type visibility is said to be (at a minimum) $300 Billion dollars. Under the new guidelines (for example), if the types percolate starts to hurry and you hurry to the bank to take out your hard earned cash (or think that you will be secured by FDIC insurance), now obviously there are guidelines in place whereby your hard earned cash (deposits) will no more really be YOUR cash.
Under the FDIC, US remains that are less than $250,000 are secured by the federal insurance policy. HOWEVER, the plan resources are entirely insufficient to manage a significant failing. The insurer’s cash set aside for financial collapse is obviously just $25 billion, a little part of what would be needed. Even if only one significant (too big to fail) financial institution is not able, there will be nowhere near enough insurance policy’s cash. And if the $300 trillion types industry unwinds, the resources are not even a speck of the overall scale.
During a financial collapse, lenders will have first concern for any resources which may be available for payout. Since financial institution depositor resources are now considered to be ‘unsecured debt’, the remains will generally be changed into bank value, which means that the depositors will become last to be paid out. And there might not be any cash remaining to be compensated out.
Even though the FDIC isn’t there to support a type failing, the FDIC insurance policy does not and will not (ever) have even a little part of the $300 trillion among the financial failures of a types problems. And if you think that all it will take is for the federal to create the cash (enough to avoid wasting the banks) all that will be remaining (after Forex decline due to large printing) will be a part of what your money was once worth.
When the financial crisis does happen, you can forget about getting immediate access to your hard earned cash. The financial institutions will say, well, we don’t have it. The cash goes into one big share since Glass-Steagall was withdrawn. They are permitted to bet with that cash and that’s what they do. I think maybe Bank of The United States is the most insecure because of Merrill Lynch. Everybody is involved, and they do very dangerous offers and they are on the advantage.
I think they have over $50 trillion in types and over $1 trillion in remains. The people are not going to be accountable for the big financial institutions when they are failing. It is not clear the FDIC will even be able to gain access to from the Treasury, but even if they could, who is going to pay that cash back? Let’s say they obtained $1 trillion. Who is going to pay that $1 trillion back? It will insolvent all the little financial institutions that had to play a role in this top quality.