Carney plans for state robbery of bank depositors’ cash!

0
732

ON Tuesday, amidst all the turmoil of the US presidential election, the Governor of the Bank of England, Mark Carney, announced a financial bombshell that when it goes off will lead to everyone with a bank account suddenly waking up to discover their money has gone – confiscated to keep the banks from collapse.

Carney published the Bank’s policy on setting the Minimum Requirement for its own funds and Eligible Liabilities (MREL), a requirement under the EU Bank Recovery and Resolution Directive.

According to the Bank these new rules are: ‘designed to make it easier to manage the failure of banks and building societies in an orderly way, as part of reforms to end taxpayer bailouts in the UK.’

Significantly, this statement admits that a collapse of banks is not a theoretical question but is inevitable. According to the Bank these new rules will end the previous policy of ‘bail out’ whereby bankrupt banks were kept going by pumping billions of pounds of taxpayers’ money into them.

Instead of bail-outs, which have caused a huge uprising of workers who have been forced to accept brutal austerity cuts to pay for this, in future it will be ‘bail-ins’. That is, anyone with money in the bank will see it confiscated in order to keep the bank or building society from going under and ‘prevent contagion spreading through the financial system’.

These plans involve dividing the banks up into three categories – small, medium and ‘too big to fail’. Small banks will be allowed to go bust as they are deemed to be not a big threat to the capitalists’ banking system.

For middle-sized banks, who pose a significant risk to the financial system, a ‘partial transfer’ will take place to enable them to carry on in their ‘critical functions’ while the non-critical functions like ordinary bank accounts will presumably be closed down.

For the really big banks, the vast majority in Britain, all creditors and shareholders will be liable for the banks’ debts and will see their money snatched away. Behind all this talk of an ‘orderly resolution’ regime to keep bankrupt banks afloat is the stark fact that this will be done by confiscating the savings and bank accounts of ordinary working people.

What many do not appreciate is that any money deposited in a bank ceases to be your property. It legally becomes the property of the bank – deposited cash becomes an unsecured loan to the bank. The billions of pounds of debts which the banks have in the form of speculations in the financial markets (which account for trillions of pounds) on the other hand are secured debts.

This means the banks are legally liable to pay off the hedge fund speculators and all the risky money spent in derivative trading using the money deposits (unsecured loans) of ordinary people to do so.

Bail-in is not confined to Europe; America has introduced its own version, leading one former hedge fund manager to write an article in ‘Money Morning’ magazine entitled ‘Why I’m Closing My Bank Accounts While I Still Can’.

While the wealthy bourgeoisie are rapidly moving their money out of the doomed banking system and ploughing it into gold, the working class are expected by Carney to accept the loss of all their savings and wages to keep the bankers in profit.

In Italy, where bail-in was introduced last November to try and prevent the collapse of four small banks, this resulted in the suicide of a pensioner whose entire life savings were confiscated.

This tragedy the banks are preparing to see repeated on a mass scale in the US, UK and Europe as the banking system careers over the financial cliff. With the bourgeois parties, the political staff of the capitalist class, in a state of terminal collapse in America and Europe as this crisis revolutionises workers and young people, there has never been a more favourable time for building revolutionary sections of the Fourth International in every country to lead the fast developing socialist revolution to victory and advance to a socialist economy that will expropriate the bankers and bosses and put an end to this rotten system forever.