Citizens Electoral Council of Australia

Media Release Thursday, 20 March 2014

Craig Isherwood‚ National Secretary
PO Box 376‚ COBURG‚ VIC 3058
Phone: 1800 636 432
Email: cec@cecaust.com.au
Website: http://cec.cecaust.com.au

Treasury still working on Australian ‘bail-in’ law—demand to know what’s in it

Senior Treasury figures have confirmed to the Citizens Electoral Council that the “bail-in” legislation about which the CEC warned in its full-page advertisement in The Australian on 3 December, is still under preparation.

In response to the public’s concern, the officials claimed that “bail-in” does not apply to bank deposits, only to a new type of bank bond.

However, given the way bail-in has been applied around the world, and the Australian government’s own track record with bank deposits, the Australian people must demand to know exactly what will be in the legislation.

First, take the government’s approach to bank deposits. Abbott and Hockey are keeping the legislation that Rudd rammed through last year, to seize deposits in bank accounts that have been “inactive” for three years. A government source has revealed that Abbott and Hockey are keeping this measure, because the government is now dependent on this “revenue”.

Second, be aware of how bail-in has been implemented in other countries, under the supervision of the same IMF-Financial Stability Board-G20 nexus supervising it in Australia:

In March 2013 the IMF, European Commission and European Central Bank bailed in depositors in the major banks of Cyprus, when the impending failure of those banks threatened to ignite another wave of bank failures across Europe. Even though this seizure of deposits was for amounts above the guaranteed threshold of 100,000 euros, it so destroyed confidence in the banking system that all accounts were frozen to avoid bank runs, and Cyprus was plunged into financial chaos and economic collapse.
That same month the president of the Eurozone finance ministers, Jeroen Dijsselbloem, declared the Cyprus bail-in was now the “template” for the entire Eurozone.
On 13 October 2013 the IMF’s Fiscal Monitor report proposed a one-off, across-the-board seizure of 10% of the private wealth of the citizens of Europe, from their bank accounts, to reduce public debt.
The Reserve Bank of New Zealand has implemented its own bail-in policy called Open Bank Resolution, in which depositors have no protection, but like all “unsecured creditors” will see a portion of their accounts seized to keep the bank going. The RBNZ brags that its OBR policy is aligned with the Financial Stability Board’s Key Attributes of Effective Resolution Regimes, which includes bail-in.

Under the pressure they are getting from the public, the Australian government is trying to claim that its planned bail-in law doesn’t involve seizing deposits, but the public should not accept that reassurance until it is shown in writing in the legislation.

The CEC is leading the fight to force the government to come clean on this issue, and abandon any plans it has for depositor bail-ins. Join the fight!

Click here to sign the CEC’s statement against bail-in and, instead, for a Glass-Steagall separation of risky investment banking from retail banking, so that deposits in retail banks are kept safe.

Click here for a free copy of the CEC’s new pamphlet, Glass-Steagall NOW!, which shows how stopping the global financial meltdown begins with Glass-Steagall.

Click here to join the CEC as a member.

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