By
Lowell Ponte
In
the November 10 London Telegraph,
James Titcomb reports that the chairman of the international Financial
Stability Board Mark Carney, Governor of the Bank of England, reveals how
future bank problems will be handled. His plan is that future problems in banks
that are "too big to fail" will never again end in government
bailouts using taxpayer money. Instead, as Craig Smith and I explained in our
latest book, Don't Bank On
It! The Unsafe World of 21st Century Banking, governments will employ
"bail ins" forcing what he calls "creditors" of various
kinds to bear banks' losses.
This
seemingly good news, however, conveniently neglects to reveal who all these "creditors"
are. It turns out that they include mere bank employees, whose income and
pensions may get a "haircut" to cover bank shortfalls. Those stuck
paying for bank shortcomings may also include customers - depositors who do not
understand that when they opened a bank account, they were in effect lending
their money to a bank and getting in return only an IOU. [more...]
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