Depositor Haircuts SpreadingStephen Lendman On March 21, it was submitted. It endorsed depositor haircuts. It did so before Cypriot trouble erupted. Its Establishing a Risk Management Framework for Domestic Systemically Important Banks section (pages 144-145) states: Canadas large banks are a source of strength for the Canadian economy. The Government.recognizes the need to manage the risks associated with systemically important banks those banks whose distress or failure could cause a disruption to the financial system, and, in turn, (have) negative impacts on the economy. 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. 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. Official policy endorses haircuts. Depositor funds will be used for recapitalizations. Implementation details werent explained. Expect confiscation. Doing so reflects grand theft. A previous article said banks legally own depositor funds. Our money is theirs. They can seize it in return for IOUs (promises to repay). Smart money says dont bet on it. Its gone. Once taken, expect little or nothing back. A new template was established. Cypriot confiscations spreading. In may show up in a neighborhood near you. Bad ideas proliferate fast. Expect ordinary people to be hurt most. RT said Cypriot policy looks likely to (become) full-scale EU law, letting taxpayers off the hook in case a bail-out is needed, but imposing major losses on bigger savers on a permanent basis. EP member Gunnar Hokmark heads Euroland negotiations. Legislation was drafted for problem banks. You need to be able to do the bail-in with deposits, he said. Amounts below 100,000 euros are protected. Deposits above 100,000 euros are not protected, and shall be treated as part of the capital that can be bailed in. Dont bet against all deposits being tapped. If enough funds are needed, theyre fair game. The skys the limit. Entire accounts may be taken. Saving banks matters most. All options are on the table. Legislation awaits Euroland member states approval. Early 2015 implementation is planned. If trouble erupts sooner, it could happen any time. Depositor confiscation is policy. Its spreading like wildfire. It may, show up anywhere. Your money is theirs. Its there for the taking. As much as needed can be seized. Life savings can be wiped out. Theres no place to hide. Forewarned is forearmed. Financial analyst Martin Weiss suggests troubled Cypriot banks are canaries in the coal mine. TV talking heads say no one could have possibly known what was coming. Dont believe them! Last April, Weiss Ratings gave Bank of Cyprus and Laiki Bank D- grades. In December they were downgraded to E-. Doing so put them on death watch. They stood on the very brink of failure. Dont believe claims about stabilized or contained crisis conditions. Nothing could be further from the truth, said Weiss. The worst is yet to come. Expect massive losses from 40 to 80 percent on uninsured deposits. Draconian restrictions were imposed. Contagions spreading. Its planned for other European countries. According to Weiss, restricting free capital movement directly violates EU treaties. No matter. Eurocrats have final say. Depositor haircuts and capital controls were imposed. What message does THAT send to global investors who have trillions of euros and pounds on deposit in Europe? The answer is simple. The message is better get the hell out of Europe while you still can, before the Troika helps other countries slap on more capital controls, trapping your money there, too. If only Cypriot banks were troubled, damage to depositor confidence might be minimized. Thats absolutely not the case. Some of the most endangered banks are among the largest (ones) in the world. European banks are especially troubled. Contagions heading their way. European Parliament legislation explained. Depositor haircuts are planned. Major French, British, Spanish, German, Italian and other European banks are knee deep in bad loans. Theyre all in or near the same condition as Cyprus banks were a year or two ago. Three major banks have E- ratings. Others approach them. Expect tremendous downward euro pressure. Expect big trouble any time. Expect depositors to bear the greatest burden. Recapitalizing troubled banks falls on their backs. Instead of nationalizing them, breaking them up, or closing them down, theyll be given new operating life. Theyll be free to steal again. Doing so perpetuates injustice. Expect it. Its official policy. Stephen Lendman lives in Chicago and can be reached at lendmanstephen@sbcglobal.net.His new book is titled How Wall Street Fleeces America: Privatized Banking, Government Collusion and Class War.Also visit his blog site at sjlendman.blogspot.com and listen to cutting-edge discussions with distinguished guests on the Progressive Radio News Hour on the Progressive Radio Network Thursdays at 10AM US Central time and Saturdays and Sundays at noon. All programs are archived for easy listening.http://www.progressiveradionetwork.com/the-progressive-news-hour/ 