Bail-in and the Confiscation of Bank Deposits: The Birth of the New Financial Order

Saturday, April 13, 2013
By Paul Martin

By James Corbett and Prof Michel Chossudovsky
Global Research
April 13, 2013

Those who follow the markets closely know that, at base, the current financial system is founded not on the bedrock of sound economic principles but instead upon the quicksand of public perception. All it takes is one large bump in the road to upset even the largest of economic bandwagons and usher in a new financial paradigm.

In the ongoing meltdown of the European Union, perhaps the greatest single bump in the road so far just took place in Cyprus. In the immediate aftermath of the dramatic bank holiday and bail-in events of last month, many in the financial media began asking whether Cyprus represents a template for future bail-ins across the European Union or elsewhere around the globe.

If we are going to seriously ask this question, however, it is vital that we understand exactly what happened, and what kind of template this might represent.

The crisis in the Cyprus banking sector has been building for years, as the small island nation’s banks began to account for a greater and greater share of its economy. The trigger event causing the recent crisis, however, was—appropriately enough—the result of a meltdown elsewhere in the Eurozone, in Greece.

After months of negotiations, the government of Cyprus announced it was on the verge of a 10 billion Euro bailout deal with the so-called “troika” of the EU, the ECB and the IMF. But when details of the plan emerged, including the fact that it had the confiscation of both insured and uninsured bank deposits baked into the cake, protests erupted around the country.

The final deal ended up keeping deposits under 100,000 Euros untouched, but uninsured deposits were restructured, wiping out the savings and cash flow of foreign depositors and local businesses alike.

The Rest…HERE

Comments are closed.

Join the revolution in 2018. Revolution Radio is 100% volunteer ran. Any contributions are greatly appreciated. God bless!

Follow us on Twitter