europe bail in official policy now

[600watt]

wow. the european politicians & banksters officially announced that when a bank is in trouble (and A LOT of european banks are indeed) shareholders and customers have to pay for it.

http://www.spiegel.de/wirtschaft/soziales/eu-finanzminister-einigen-sich-auf-regeln-fuer-pleitebanken-a-908069.html


so we have a potential for a european-wide cyprus scenario.  

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[notme]

wow. the european politicians & banksters officially announced that when a bank is in trouble (and A LOT of european banks are indeed) shareholders and customers have to pay for it.

http://www.spiegel.de/wirtschaft/soziales/eu-finanzminister-einigen-sich-auf-regeln-fuer-pleitebanken-a-908069.html


so we have a potential for a european-wide cyprus scenario.  

Don't keep cash in your accounts past the insured limit.  If you are doing this, you are voluntarily acting as an at risk creditor.

[caveden]

I've said it once and will repeat: there's no fairer way to deal with a bank failure than a bail-in:

• Current bank owners (shareholders) should lose everything.
• Creditors should lose the necessary amount to save the bank, starting by those who accepted more risks (like bondholders) until those who did not accept much risk (depositors). Ideally, depositors should not lose anything or very little - but if the hole was too huge, they might end up with a significant cut.
• These same creditors should be rewarded with ownership of the bank. For example, if you lost 10K, and in total 10G were needed to save the bank, you now must own a millionth part of the bank in shares.

I can see no way to make it fairer than this. Tax victims should not have to spend a dime - that's externalizing a cost to people that had nothing to do it (imposed negative externality, moral hazard, private profit public losses etc). Only those involved with the failed bank should. Federal/national insurances of bank deposits are unfair by definition and should never have been created in the first place.

[Crypt_Current]

cue rocket takeoff pic thread

[Rampion]

wow. the european politicians & banksters officially announced that when a bank is in trouble (and A LOT of european banks are indeed) shareholders and customers have to pay for it.

http://www.spiegel.de/wirtschaft/soziales/eu-finanzminister-einigen-sich-auf-regeln-fuer-pleitebanken-a-908069.html


so we have a potential for a european-wide cyprus scenario.  

Don't keep cash in your accounts past the insured limit.  If you are doing this, you are voluntarily acting as an at risk creditor.

Like the insurance limit means something... Sure, better not having more than the insured limit, is another layer of (fragile) protection, but still the only sound hedge against the financial system is BTC

[notme]

I've said it once and will repeat: there's no fairer way to deal with a bank failure than a bail-in:

• Current bank owners (shareholders) should lose everything.
• Creditors should lose the necessary amount to save the bank, starting by those who accepted more risks (like bondholders) until those who did not accept much risk (depositors). Ideally, depositors should not lose anything or very little - but if the hole was too huge, they might end up with a significant cut.
• These same creditors should be rewarded with ownership of the bank. For example, if you lost 10K, and in total 10G were needed to save the bank, you now must own a millionth part of the bank in shares.

I can see no way to make it fairer than this. Tax victims should not have to spend a dime - that's externalizing a cost to people that had nothing to do it (imposed negative externality, moral hazard, private profit public losses etc). Only those involved with the failed bank should. Federal/national insurances of bank deposits are unfair by definition and should never have been created in the first place.

Insurance was okay when banks had a very limited set of things they were allowed to do.  Now that they act as broker/dealers you are absolutely right.

[myself]

english link plz

edit: http://www.reuters.com/article/2013/06/27/us-eu-banks-idUSBRE95Q02L20130627

[domob]

I've said it once and will repeat: there's no fairer way to deal with a bank failure than a bail-in:

• Current bank owners (shareholders) should lose everything.
• Creditors should lose the necessary amount to save the bank, starting by those who accepted more risks (like bondholders) until those who did not accept much risk (depositors). Ideally, depositors should not lose anything or very little - but if the hole was too huge, they might end up with a significant cut.
• These same creditors should be rewarded with ownership of the bank. For example, if you lost 10K, and in total 10G were needed to save the bank, you now must own a millionth part of the bank in shares.

I can see no way to make it fairer than this. Tax victims should not have to spend a dime - that's externalizing a cost to people that had nothing to do it (imposed negative externality, moral hazard, private profit public losses etc). Only those involved with the failed bank should. Federal/national insurances of bank deposits are unfair by definition and should never have been created in the first place.

I completely agree here!  (But I do not agree with how it was done in Cyprus with the banks and payment systems effectively closed down without warning for weeks, because I believe it is the responsibility of a government to ensure proper functioning in the society.  And the payment system is part of that, a very important one, too.)

I read some time ago (I think it was the Bitcoin Magazine) about a comparison between risky/speculative banking and Martingale gambling.  Their speculation goes well most of the time and so they earn big time (and also make themselves a name as a "good investor"), but when it fails big time, they don't have to pay the price because it is done by the tax payers.  Hence an ideal system for the gamblers, Martingale finally working.

[EuroTrash]

I've said it once and will repeat: there's no fairer way to deal with a bank failure than a bail-in:

• Current bank owners (shareholders) should lose everything.
• Creditors should lose the necessary amount to save the bank, starting by those who accepted more risks (like bondholders) until those who did not accept much risk (depositors). Ideally, depositors should not lose anything or very little - but if the hole was too huge, they might end up with a significant cut.
• These same creditors should be rewarded with ownership of the bank. For example, if you lost 10K, and in total 10G were needed to save the bank, you now must own a millionth part of the bank in shares.

I can see no way to make it fairer than this. Tax victims should not have to spend a dime - that's externalizing a cost to people that had nothing to do it (imposed negative externality, moral hazard, private profit public losses etc). Only those involved with the failed bank should. Federal/national insurances of bank deposits are unfair by definition and should never have been created in the first place.

+1

But I believe that what is really going to happen is that shareholders will be saved and depositors will be shafted.
Then in a couple years and a merger later the bank reopens with a new name.

[nicolazza]

I love this news 
Europe's shit money will fail.

[myself]

I love this news 
Europe's shit money will fail.

not really

[myself]

I love this news  
Europe's shit money will fail.

not really

All shit money will fail but at least some of Europe knows what good money is:
https://bitcointalk.org/index.php?topic=244534

be ready to wait 20 years to even get a chance for a change

[Book]

Does this include UK banks? I might pull some of my money out.

[oleganza]

I've said it once and will repeat: there's no fairer way to deal with a bank failure than a bail-in:

• Current bank owners (shareholders) should lose everything.
• Creditors should lose the necessary amount to save the bank, starting by those who accepted more risks (like bondholders) until those who did not accept much risk (depositors). Ideally, depositors should not lose anything or very little - but if the hole was too huge, they might end up with a significant cut.
• These same creditors should be rewarded with ownership of the bank. For example, if you lost 10K, and in total 10G were needed to save the bank, you now must own a millionth part of the bank in shares.

I can see no way to make it fairer than this. Tax victims should not have to spend a dime - that's externalizing a cost to people that had nothing to do it (imposed negative externality, moral hazard, private profit public losses etc). Only those involved with the failed bank should. Federal/national insurances of bank deposits are unfair by definition and should never have been created in the first place.

It would be all well and good if you was free to create your own bank and your own currency to those who don't want to play that game. But the rules are such that you cannot do that. So if you need banking (and many people and businesses simply cannot work with paper cash for many reasons), you have to bear all the risks that these people create.

I have nothing against fractional reserve banking or "depositors bear the risk" etc. if only this was absolutely voluntary. But I bet if it was, very few people would be interested in that deal. After all, private ponzi schemes are "bad" only because of fraudulent investment promises, not because of the money distribution scheme. Call it honestly a lottery, don't force people to join and play as long as you wish.

[caveden]

I didn't get your point, oleganza.

You noted some injustices that are practiced world wide. But how does that change what I said?

Forcing taxvictims to pay for a bank rescue will always be less fair than what I wrote. Banking being a fucked up industry or not.

[coinft]

I've said it once and will repeat: there's no fairer way to deal with a bank failure than a bail-in:

• Current bank owners (shareholders) should lose everything.
• Creditors should lose the necessary amount to save the bank, starting by those who accepted more risks (like bondholders) until those who did not accept much risk (depositors). Ideally, depositors should not lose anything or very little - but if the hole was too huge, they might end up with a significant cut.
• These same creditors should be rewarded with ownership of the bank. For example, if you lost 10K, and in total 10G were needed to save the bank, you now must own a millionth part of the bank in shares.

I can see no way to make it fairer than this. Tax victims should not have to spend a dime - that's externalizing a cost to people that had nothing to do it (imposed negative externality, moral hazard, private profit public losses etc). Only those involved with the failed bank should. Federal/national insurances of bank deposits are unfair by definition and should never have been created in the first place.

I agree principally, with caveats.

Insurances may well be fair if payed for by taxes or otherwise.

And to be fair, especially if depositors lose something, there need to be criminal investigations and convictions for letting it develop that far. In boom times high management salaries are always explained with responsibility and personal risk. In bad times the responsibility vanishes instantly, but not the perceived right to high bonus payments. Handle them like small company owners is all I ask for. Clawbacks for years past should be considered too. Yes that's meddling in contracts, but so is cutting deposits.

[Spaceman_Spiff]

I've said it once and will repeat: there's no fairer way to deal with a bank failure than a bail-in:

• Current bank owners (shareholders) should lose everything.
• Creditors should lose the necessary amount to save the bank, starting by those who accepted more risks (like bondholders) until those who did not accept much risk (depositors). Ideally, depositors should not lose anything or very little - but if the hole was too huge, they might end up with a significant cut.
• These same creditors should be rewarded with ownership of the bank. For example, if you lost 10K, and in total 10G were needed to save the bank, you now must own a millionth part of the bank in shares.

I can see no way to make it fairer than this. Tax victims should not have to spend a dime - that's externalizing a cost to people that had nothing to do it (imposed negative externality, moral hazard, private profit public losses etc). Only those involved with the failed bank should. Federal/national insurances of bank deposits are unfair by definition and should never have been created in the first place.

Agreed, I for one didn't understand why what I have been told is normal bankruptcy law (first the shareholder loses his money, then bondholders, then depositors) was not used in previous bank-ruptcies.  It's ridiculous that they have only implemented this now.  

[Tal1m0n]

If the USD were to fail today then I believe bitcoin would probably be wiped out. But if it has a chance to grow further and be recognized on it's own - maybe in another year or two will be enough time for btc to decouple from the American currency and reach main stream, then it might actually be what causes the crash to happen, while bitcoin lives on as it's own beast.

In case of economic collapse people would probably prefer a digital currency that no corrupt Government could control.

In case of societies collapse due to WW3 then Gold and Silver would probably be more useful, unless digital currencies had a decade or more to integrete with their spending habits. In the short term future complete loss of internet structure is unlikely, as "Mesh Nets" and other technologies are becoming more popular. Thanks to Google and other companies, looking for very cheap solutions for deploying internet in places like Africa and remote parts of the world. The internet might get knocked offline in the beginning but we would be able to rebuild it.


And actually the original purpose of the internet, why it was developed by the Government after the Cold War in case of nuclear attack so societies could continue to communicate.

[johnyj]

If the USD were to fail today then I believe bitcoin would probably be wiped out. But if it has a chance to grow further and be recognized on it's own - maybe in another year or two will be enough time for btc to decouple from the American currency and reach main stream, then it might actually be what causes the crash to happen, while bitcoin lives on as it's own beast.

In case of economic collapse people would probably prefer a digital currency that no corrupt Government could control.

In case of societies collapse due to WW3 then Gold and Silver would probably be more useful, unless digital currencies had a decade or more to integrete with their spending habits. In the short term future complete loss of internet structure is unlikely, as "Mesh Nets" and other technologies are becoming more popular. Thanks to Google and other companies, looking for very cheap solutions for deploying internet in places like Africa and remote parts of the world. The internet might get knocked offline in the beginning but we would be able to rebuild it.


And actually the original purpose of the internet, why it was developed by the Government after the Cold War in case of nuclear attack so societies could continue to communicate.

Very small chance of a large scale conflict due to nuclear weapons, there is no winner for a nuclear war. So more likely the war will be on the currency and financial front, each country tries to devaluate its currency to force others pay for their debt, eventually all the currencies were hurt badly during a currency war, and bitcoin stands out

[edmundedgar]

I've said it once and will repeat: there's no fairer way to deal with a bank failure than a bail-in:

• Current bank owners (shareholders) should lose everything.
• Creditors should lose the necessary amount to save the bank, starting by those who accepted more risks (like bondholders) until those who did not accept much risk (depositors). Ideally, depositors should not lose anything or very little - but if the hole was too huge, they might end up with a significant cut.
• These same creditors should be rewarded with ownership of the bank. For example, if you lost 10K, and in total 10G were needed to save the bank, you now must own a millionth part of the bank in shares.

I can see no way to make it fairer than this. Tax victims should not have to spend a dime - that's externalizing a cost to people that had nothing to do it (imposed negative externality, moral hazard, private profit public losses etc). Only those involved with the failed bank should. Federal/national insurances of bank deposits are unfair by definition and should never have been created in the first place.

Agreed, I for one didn't understand why what I have been told is normal bankruptcy law (first the shareholder loses his money, then bondholders, then depositors) was not used in previous bank-ruptcies.  It's ridiculous that they have only implemented this now.  

Basically governments are scared of contagion. If you see one bank go down, you run on another one, and that goes bad too. (Probably also some corruption, because people who would lose out are good at influencing the government.)

I think a lot of people here have got the meaning of this backwards. When governments offer full bail-outs with taxpayers's money, it's because they think all the banks are very shaky, and they don't dare let one of them fail in case the rest of them topple, too. What's happening now is that the European banks are gradually getting more stable, so governments are feeling confident enough to try to reassert the original principles of how bank failures were always _supposed_ to work.