Ellen Brown: It Can Happen Here, The Bank Confiscation Scheme

for US and UK Depositors. Confiscating the customer deposits in Cyprus banks,, it seems, was not a one off, desperate idea of a few Eurozone troika officials, scrambling to salvage their balance sheets. A joint paper by the US Federal Deposit Insurance Corporation, and the Bank of England, dated December 10, 2012, shows that these plans have been long in the making. That they originated with the G20 Financial Stability Board in Basel, Switzerland, and that the result will be to deliver clear title to the banks of depositor funds. New Zealand has a similar directive, discussed in my last article here, indicating that this isn't just an emergency measure for troubled Eurozone countries. New Zealand's Voxy reported on March 19th. The National Government is pushing a Cyprus style solution to bank failure in New Zealand, which will see small depositors lose some of their savings to fund big bank bailouts. Open Bank Resolution (OBR) is Finance Minister Bill English's favored option dealing with a major bank failure. If a bank fails under OBR, all depositors will have their savings reduced overnight, to fund the banks bail out. Can They Do That? Although few depositors realize it, legally the bank owns the depositors funds, as soon as they are put in the bank. Our money becomes the banks, and we become unsecured creditors, holding IOU's or promises to pay. Until now the bank has been obligated to pay the money back on demand, in the form of cash. Under the FDIC-BOE plan, our IOU's will be converted into bank equity. The bank will get the money, and we will get stock in the bank. With any luck, we may be able to sell the stock to someone else, but when and at what price? Most people keep a deposit account, so they can have ready cash to pay the bills. The 15 page FDIC-BOE document is called Resolving Globally Active. Systematically Important. Financial Institutions. It begins by explaining that the 2008 banking crisis has made it clear, that some other way, besides taxpayer bailouts is needed to maintain financial stability. Evidently anticipating that the next financial collapse will be on a grander scale, than either the taxpayers or Congress is willing to underwrite, the authors state: An efficient path for returning the sound operations of the G-SIFI to the private sector, would be provided, by exchanging or converting a sufficient amount of the unsecured debt, from the original creditors of the failed company, meaning the depositors, into stock.