Buried deep within the 2013 Federal Budget is an ominous tidbit that has not been widely discussed in the media or critiqued by the opposition parties.
"The Government proposes to implement a “bail-in” regime for systemically important banks. This regime will be designed to ensure that, in the unlikely event that a systemically important bank depletes its capital, the bank can be recapitalized and returned to viability through the very rapid conversion of certain bank liabilities into regulatory capital. This will reduce risks for taxpayers. The Government will consult stakeholders on how best to implement a bail-in regime in Canada. Implementation timelines will allow for a smooth transition for affected institutions, investors and other market participants."I am far from expert in global economics but this budget statement and recent events in Europe has driven me to ask several questions. Does this mean that troubled banks will be allowed to grab deposits to return to viability (ala Cyprus)? If so, how does one protect oneself? Should we have multiple bank accounts, buy silver, put money in a mattress ?
We are fortunate to have Ted Menzies as our MP AND the Minister of State for Finance. I'm sure he will be taking it upon himself to explain the details and giving advice to his electorate in the near future. I will be contacting Ted to remind him of his obligations, and hope others will do the same.
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