Saturday, July 29, 2017

EU preparing new rules to freeze your money without notice to protect failing banks from bank runs and withdrawals

In 2017 the global banking system has seen at least three major bank runs take place in institutions residing in Canada, Spain, and Italy where depositors took proactive steps to get their money out before these facilities either collapsed, or engaged in a bail-in to protect themselves against total insolvency.  And while the governments of these countries showed restraint in either calling for a bank holiday or conducting a confiscation of depositors monies, this may soon be changing as the European Union has issued a new proposal allowing the legislative body to freeze bank accounts in any EU nation where a given bank may be on the cusp of bankruptcy or insolvency.

Graphic by Spiros Derveniotis
If there is a run on the bank, any bank in the EU, you better be among the first to get your money out. 
Although it’s your money, the EU wants to Freeze Accounts to Prevent Runs at Failing Banks
European Union states are considering measures which would allow them to temporarily stop people withdrawing money from their accounts to prevent bank runs, an EU document reviewed by Reuters revealed. 
The move is aimed at helping rescue lenders that are deemed failing or likely to fail, but critics say it could hit confidence and might even hasten withdrawals at the first rumors of a bank being in trouble. – Mish Talk
Whenever you see governments or financial regulators instituting laws (such as Dodd-Frank in the U.S.) which remove your power and rights over your own money, then it needs to be seen as a warning that they know something major is about to take place, and are preparing on their side for that event.  And it also means that the clock is now ticking for you as a depositor, who must decide what to do with your own wealth before politicians or central bankers get to decide for you.

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