How Private And Safe Is Your Bank Account? Will Your Money Be “Bailed-In”?

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Cyprus took their citizen’s money

It’s well known now that the Cyprus government recently dipped their hands into their citizens and foreigner’s bank accounts and effectively stole people’s savings and business’ capital in order to “bail-in” some banks. This breaks a key element of trust that people have – money in a bank that they thought was secure is no longer secure.

Wisconsin, USA has a proposal to break into bank accounts

Now, there is a proposal in Wisconsin, USA to allow the state government to get information from banks and dip into citizen’s bank accounts if there are errors in unemployment payments made. This breaks the trust and confidence citizens expect to have from their bank – money in the bank is not safe anymore.

See the article from The Huffington Post here.

Other European countries are trying to break into citizen’s bank accounts

At the same time that this is happening, European Finance Ministers are discussing using the “bail-in” model in other countries should banks become insolvent there. This again would mean going after bank account holder’s funds should more banks get into liquidity troubles there. Banks and European governments would effectively steal money from account holders.

See the article from the The Irish Times here.

What if it happens here?

The trend seems to be that money in a bank account is no longer off limits to outside parties. Unfortunately there will probably be more transgressions into bank account holder privacy and funds – not less – in the future.

In this year’s budget, the Canadian government has written provisions to allow “bail-ins” in the case of bank capital collapse. Here are the relevant paragraphs taken directly from the budget document. Read the whole 2013 Economic Action Plan here (PDF).

From Page 144 & 145:
“The Government also 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, negative impacts on the economy. This requires strong prudential oversight and a robust set of options for resolving these institutions without the use of taxpayer funds, in the unlikely event that one becomes non-viable.”
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…”
Translated, “Without the use of taxpayer funds” means via depositor funds (ie. Your funds).

Now imagine if you are a good saver and doing everything right. You have a nice nest egg in your bank account to use for your home, your kids, your business, investing or your retirement – and all of a sudden an outside force comes in and takes a big chunk of it with no recourse. It would be a disaster for millions of Canadians and would set all of your goals back by years and years.

What can you do to protect yourself?

Setting up an Infinite Banking system for yourself, your family and your business puts your nest egg outside of the banking system and subjects your funds to different laws and regulations outside of the bank system.

Money inside a properly structured Infinite Banking policy comes with privacy and legal protections that are not available on regular bank accounts and investment accounts and can give you peace of mind that a collapsing bank won’t take all your savings down with it.

Please contact us for a free consultation about what you can do to protect your money from “bailing-in” banks if they go down (see Contact below).