In the same category

Bail-Ins Coming – EU Gives Countries Two Months To Adopt Rules

IMG Auteur
Published : June 03rd, 2015
960 words - Reading time : 2 - 3 minutes
( 1 vote, 5/5 )
Print article
  Article Comments Comment this article Rating All Articles  
0
Send
0
comment
Our Newsletter...
Category : Market Analysis

- 11 countries face legal action if bail-in rules are not enacted within two months- Bail-in legislation aims at removing state responsibility when banks collapse- Rules place burden on creditors – among whom depositors are counted- Austria abolished bank deposit guarantee in April- “Bail-in regimes” coming globally

24hGold - Bail-Ins Coming – EU...
The European Commission has ordered 11 EU countries to enact the Bank Recovery and Resolution Directive (BRRD) within two months or be hauled before the EU Court of Justice, according to a report from Reuters on Friday.

The news was not covered in other media despite the important risks and ramifications for depositors and savers throughout the EU and indeed internationally.

The article “EU regulators tell 11 countries to adopt bank bail-in rules” reported how 11 countries are under pressure from the EC and had yet “to fall in line”. The countries were Bulgaria, the Czech Republic, Lithuania, Malta, Poland, Romania, Sweden, Luxembourg, the Netherlands, France and Italy.

France and Italy are two countries who are regarded as having particularly fragile banking systems.

The rules, known as the Bank Recovery and Resolution Directive (BRRD), aim ostensibly, to shield taxpayers from the fall out of another banking crisis. Should such a crisis erupt governments will not be obliged to prop up the banks. At any rate most countries are far too deeply indebted to play such a role.

Instead, the burden is being placed on the creditors. As Reuters put it,

The rules seek to shield taxpayers from having to bail out troubled lenders, forcing creditors and shareholders to contribute to the rescue in a process known as “bail-in”.

However, if recent events in Austria are anything to go by, creditors now also include depositors of banks. In April, Austria enacted legislation which removed government liability for all bank deposits.

Until then, the state would protect deposits of ordinary people and companies up to a value of €100,000. In its place a bank deposit insurance fund is being set up. This fund appears inadequate to protect savers’ deposits in the event of any kind of bank failure. We covered the story in more detail here.

Each country will enact its own version of the BRRD. How vulnerable savers are in specific countries is difficult to tell at this time. The drive towards a cashless economy which has accelerated in recent months makes deposit holders and savers ever more vulnerable.

This bail-in legislation which is being driven by the BIS through the Bank of England, ECB, Federal Reserve and Federal Deposit Insurance Corporation (FDIC)  appears designed to protect banks by allowing them to confiscate deposits to prop them up rather than the noble stated objective – “to shield taxpayers”.

Those who hold deposits in our banks are also taxpayers and have already paid tax in order to earn the money that is on deposit.

Allowing for the confiscation of deposits is a retrograde step and may be the last straw for an already enfeebled western banking system. It will also be very deflationary as a primary source of capital and demand – from companies and consumers – is confiscated.

24hGold - Bail-Ins Coming – EU...
Cyprus was devastated by bail-ins and has shown little sign of recovery.

Central banks claim to be attempting to avert deflation with QE and negative interest rates and not simply bailing out and aiding overly indebted banks.

However, the bail-in of deposits would again place the interests of banks over those of taxpayers and depositors. It would be very deflationary and could be the tipping point which pushes economies into a recession and depression.

However, the key insight from Cyprus and the coming move from bail-out regimes to bail-in regimes, is that a precedent has now been created in terms of deposit confiscation. Therefore, simply having deposits in a bank is no longer the safest way to save, protect capital and conservatively grow wealth.

Conservative wealth management, asset diversification and wealth preservation will again become important and gold will again have an important role to play in order to protect, preserve and grow wealth in the coming bail-in era.

Must-read Guides:
Protecting Your Savings In The Coming Bail-In Era
From Bail-Outs To Bail-Ins: Risks and Ramifications –  Includes 60 Safest Banks In the World

MARKET UPDATE

Today’s  AM LBMA Gold Price was USD 1,186.60, EUR 1,067.23 and GBP 777.60 per ounce.
Yesterday’s AM LBMA Gold Price was USD 1,188.75, EUR 1,083.17  and GBP 779.91 per ounce.

Gold climbed $4.10 or 0.34 percent yesterday to $1,193.40 an ounce. Silver rose $0.06 or 0.36 percent to $16.80 an ounce.

24hGold - Bail-Ins Coming – EU...

Gold in GBP – 1 Week

Gold in Singapore for immediate delivery edged down 0.2 percent to $1,191.40 an ounce near the end of the day,  while gold in Switzerland ticked marginally higher.

Gold rallied a bit yesterday on the news of weak U.S. factory orders and a feeble U.S. dollar and falling stock markets, while the market looked for closure in the Greek debt negotiations.

News that Greece outlined an agreement to deliver to the Athens government strengthened the euro and saw the dollar come under pressure.

Top gold ETF holdings were seen at a five year low yesterday. SPDR Gold Trust, the world’s largest gold  exchange-traded fund, said its holdings fell 0.59 percent to 709.89 tonnes on Tuesday, the lowest since January.

Holdings of all gold ETFs are close to their lowest in nearly six years showing the very poor sentiment towards gold.

The current holding pattern on the gold price continues. The non farm payrolls number on Friday will be keenly watched for signs about how bad the slowdown in the U.S. is.

In late morning trading gold bullion is down 0.43 percent at $1,188.43 an ounce. Silver is off 0.76 percent at $16.64 an ounce and platinum is down 0.12 percent at $1,111.67 an ounce.

Data and Statistics for these countries : Austria | Bulgaria | Cyprus | Czech Republic | France | Greece | Italy | Luxembourg | Malta | Netherlands | Poland | Romania | Singapore | Sweden | Switzerland | All
Gold and Silver Prices for these countries : Austria | Bulgaria | Cyprus | Czech Republic | France | Greece | Italy | Luxembourg | Malta | Netherlands | Poland | Romania | Singapore | Sweden | Switzerland | All
<< Previous article
Rate : Average note :5 (1 vote)
>> Next article
Mark O'Byrne is executive and research director of www.GoldCore.com which he founded in 2003. GoldCore have become one of the leading gold brokers in the world and have over 4,000 clients in over 40 countries and with over $200 million in assets under management and storage.We offer mass affluent, HNW, UHNW and institutional investors including family offices, gold, silver, platinum and palladium bullion in London, Zurich, Singapore, Hong Kong, Dubai and Perth.
WebsiteSubscribe to his services
Comments closed
Latest comment posted for this article
Be the first to comment
Add your comment
Top articles
Latest Comments
Will The Gold/Silver Ratio Approach 15:1?
14 AugS W.
Who cares?
Dollar Up, Gold Prices Down for Longest Run in 24 Years as Comex Be...
07 AugRocco
Gold prices are down and Bullion Exchanges are still offering the best prices I can find. https://bullionexchanges.com/
Silver Price Forecast 2019/2018: Silver Bull Market Is Almost Here
19 JulS W.
Hi Rocco. Now that silver has gone below Moolman's 15.995 and according to him that this signals a long term bear market...have you got a pla...
Silver Price Forecast 2019/2018: Silver Bull Market Is Almost Here
14 JulS W.
How can you sell at $60 if you've sold it all $30 What is your stop price $ It will not surprise me to see it go to $10 or $11 because...
Silver Price Forecast 2019/2018: Silver Bull Market Is Almost Here
09 JulRocco
100% for a safe profit investment. If it goes above $60 for sure i'm going out and selling ALL my silver to http://nycbullion.com ... I would even ...
Silver Price Forecast 2019/2018: Silver Bull Market Is Almost Here
05 Julprljr
Good ??'s I was wondering the same things.
Silver Price Forecast 2019/2018: Silver Bull Market Is Almost Here
04 JulS W.
If the market ? goes bearish or bullish you have to ask yourself the question "why did I buy silver in the first place?" Do you have a stop? What i...
Silver Price Forecast 2019/2018: Silver Bull Market Is Almost Here
02 JulRocco
Great article, I think/hope silver will continue the bull!! I've invested in too much silver for it to start being a bearish market!
Most commented articlesFavoritesMore...
World PM Newsflow
ALL
GOLD
SILVER
PGM & DIAMONDS
OIL & GAS
OTHER METALS