What Will Happen When Banks Go Bust? Bank Runs, Bail-Ins and Systemic Risk
Financial podcasts have been featuring ominous headlines lately along the lines of “Your Bank Can Legally Seize Your Money” and “Banks Can STEAL Your Money?! Here’s How!” The reference is to “bail-ins:” the provision under the 2010 Dodd-Frank Act allowing Systemically Important Financial Institutions (SIFIs, basically the biggest banks) to bail in or expropriate their creditors’ money in the event of insolvency. The problem is that depositors are classed as “creditors.” So how big is the risk to your deposit account? Part I of this two part article will review the bail-in issue. Part II will look at the derivatives risk that could trigger the next global financial crisis.
Read the full article here.
Not quite sure what you mean, but yes, if you can pay off your debts and own your own home, that's ideal. The podcasters I tend to listen to think a market crash is coming this year. The Fed is not pivoting any time soon.
Ellen, thank you for this information. There may be other problems with the Dodd-Frank legislation.
Given the system that exists and our authoritarian arrangement, I'm puzzled as to how a public banking system could be implemented let alone survive the strangle hold of the Federal Reserve? The process of doing this is bound to be manipulated to serve political gaming.
Also, not sure if part 2 will address, but CBDC is moving forward. My understanding is that if/when it occurs it would undermine the existence of local community banks (the banks of last resort in the Dodd-Frank scenario).
It's seems the CBDC and the Federal Reserve are the 800 elephants in our room.
Lastly I'd really like to hear a discussion between you and Catherine Austin Fitts. I think you'd agree in theory regarding public banks, but I'm as puzzled by her take as your when we leave the theoretical realm and enter the political one.