Strathfield Council Glass-Steagall Motion to 2014 National General Assembly of Local Government

RECOMMENDATION

That Council endorse the proposed Notice of Motions to the 2014 National General Assembly of Local Government as set out in the report.

PURPOSE OF REPORT

To advise Council of the proposed Motions to be tabled at the 2014 National General Assembly of Local Government and to seek Council endorsement of the motions.

REPORT

As part of the 2014 National General Assembly of Local Government (NGA) which will be held in Canberra from 15 to 18 June 2014, participating Councils have been requested to provide Notice of Motions to the Assembly no later than 17 April 2014.

The following three Motions are proposed:

Motion

That in the interests of protecting bank deposits of Local Government ratepayers and residents the National General Assembly of Local Government:

• (i) Is unalterably opposed to the legislation now being drafted to enable the "bail-in" (seizure) of Australian bank deposits as happened in Cyprus in March of last year.
• (ii) urges the Australian Parliament to, instead of passing legislation enabling "bail-in", pass legislation modelled upon the U.S. Glass-Steagall law which functioned so successfully from its passage in 1933 until its repeal in 1999, which separated commercial banking from investment banking.

Why is this a national issue and why should this be debated at the NGA?

The stated purpose of such legislation, in Australia and internationally, is to save the "Too Big To Fail" megabanks whose unbridled speculation has caused the present financial crisis in the first place.

Summary of Key Arguments

Background information and supporting arguments

There is overwhelming evidence that legislation is being planned for Australia, as in a 15 April 2013 report of the Financial Stability Board (FSB) of the Swiss-based Bank for International Settlements which is overseeing the global bail-in process; that report explicitly states on page 5 that such legislation is "in-train" for Australia. The FSB and the IMF have classified Australia's "Big Four" banks as "Systemically Important Financial Institutions", which must be saved at all costs.

Part two of the motion calls for the separation of commercial and investment banking to protect bank deposits. Without such a separation, banks are free to speculate with customers' deposits, which, for instance, is why Australian banks now hold some $21.5 trillion [now $23 trillion according to latest Reserve Bank statistics - ed.] in highly risky derivatives.

Numerous prominent individuals even from the City of London and Wall Street have spoken out to urge the reinstatement of Glass-Steagall, and legislation to do so has been introduced into both the U.S. House of Representatives and Senate, as well as in numerous other countries. This would prohibit the seizing of bank accounts.