Trudeau' 'budget' slips in proposal to seize your bank account if bank fails.

Trudeau' 'budget' slips in proposal to seize your bank account if bank fails. HT: CIJNews.

Did you see what Justin Trudeau slipped into the budget this week, hidden away on page 223?
It’s called a bank “bail-in regime”.

That means if a Canadian bank starts to fail, it would be allowed to seize your bank account to pay its bills. Seriously.

It’s what they did in Cyprus three years ago, when bankers there made risky loans to Greece. In a back-room deal, politicians and bankers decided to pay off the bank debts by just seizing 10% of everyone’s deposits.

The country had a melt-down. Banks closed, ATM withdrawals were limited. It was a disaster. Of course, well-connected insiders got all of their cash out in time.

It’s all right there in black and white in Trudeau’s budget. Click here to see for yourself.

This outrageous proposal is not yet law. But if Canadians accept it in silence, it will be. Hmmm.....If you want to know a 'man's' Character give him power! Read the full story here. 2016 Budget can be downloaded here.

"The Great Bank Robbery" - Germany's Bundesbank calls for capital levy on the citizens to avert government bankruptcies.

"The Great Bank Robbery" - Germany's Bundesbank calls for capital levy on the citizens to avert government bankruptcies.(Reuters).

Germany's Bundesbank said on Monday that countries about to go bankrupt should draw on the private wealth of their citizens through a one-off capital levy before asking other states for help.

The Bundesbank's tough stance comes after years of euro zone crisis that saw five government bailouts. There have also bond market interventions by the European Central Bank in, for example, Italy where households' average net wealth is higher than in Germany.

"(A capital levy) corresponds to the principle of national responsibility, according to which tax payers are responsible for their government's obligations before solidarity of other states is required," the Bundesbank said in its monthly report.

It warned that such a levy carried significant risks and its implementation would not be easy, adding it should only be considered in absolute exceptional cases, for example to avert a looming sovereign insolvency.

The International Monetary Fund discussed the option in a report in October and said that reducing debt ratios to end-2007 levels for a sample of 15 euro area countries, a tax rate of about 10 percent on households with positive net wealth would be required.Read the full story here.

EU Leaders To Set Tight Timetable On Completing EURO BANKING UNION.

EU Leaders To Set Tight Timetable On Completing EURO BANKING UNION.(Reuters).

* EU wants agreement on bank resolution by end-year

* Wants plan on rewarding reforms by December

* Reforms seen key for sustainable growth in Europe

BRUSSELS – European leaders will confirm on Friday an ambitious timetable for the completion of a banking union, Europe’s biggest project since the euro, and set a December deadline for fleshing out the idea of rewards for structural reforms in the euro zone.Policy-makers believe a banking union in the 18 countries that will share the euro from next year will help increase the flow of credit, boost growth and help prevent financial crises in the future.

Under the union, the European Central Bank will directly supervise the euro zone’s 130 biggest banks from November 2014 and have the power to take over supervision of any of the smaller banks if needed.

Such a Single Supervision Mechanism is to be accompanied by a Single Resolution Mechanism (SRM) – a yet-to-be-created euro zone authority with its own fund that would decide how to wind down or restructure banks that are no longer viable.

As an intermediate step towards the SRM, the euro zone wants to agree on a Bank Resolution and Recovery Directive (BRRD), under which national authorities would coordinate their actions to deal with cross-border bank failures.

Euro zone finance ministers have already agreed what this intermediate law should look like, but they now need to reach a deal on the details of the legislation with the European Parliament.

European leaders meeting in the European Council will urge the parliament on Friday to adopt the BRRD and the Deposit Guarantee Directive by the end of the year, draft conclusions of their meeting, seen by Reuters, showed.

The leaders will also set an end-year deadline for euro zone ministers to move on to the next step, by agreeing on how they want the SRM to work, according to the draft conclusions.

That common position on the SRM would also have to go through the European Parliament – and time is short because the last parliamentary session before elections is in mid-April.

The European Council “underlines the commitment to reach a general approach by the Council (of ministers) on the Commission’s proposal for a Single Resolution Mechanism by the end of the year in order to allow for its adoption before the end of the current legislative period,” the conclusions said.

The European Commission, the EU executive arm, has proposed that it should be the single resolution authority – an idea that Germany opposes.

TESTS, BACKSTOPS, REFORMS AND REWARDS

Meeting all the deadlines appears ambitious, but it would allow the single resolution authority and its fund, which is to be financed from contributions from the banking sector, to become operational in early 2015 – an date favoured by the ECB.

Before the ECB takes over its supervisory duties, it wants to check all the banks’ financial health, by estimating the value of their assets under various adverse scenarios.

Because policy-makers expect the ECB check to show that some banks need more capital, EU leaders will reiterate that governments should be prepared to help if a bank cannot raise additional funds from the market.

“Member states should make all appropriate arrangements, including national backstops, applying state aid rules,” the draft conclusions said.

EU leaders also want to flesh out in December a plan for euro zone countries to sign contracts with European institutions, promising to bring in reforms to make their economies more stable. Under the scheme, countries would get money if they deliver.

“Work will be carried forward to strengthen economic policy coordination, including by agreeing in December on the main features of contractual arrangements and of associated solidarity mechanisms,” the draft conclusions said.

Some policy-makers are sceptical about such contracts, mainly because no money has yet been set aside for “solidarity mechanism”.

Cash-strapped governments would be reluctant to create a new fund of a meaningful size on top of their existing commitments to the EU-wide long-term budget.

“These contractual arrangements are extremely unattractive because they are either not possible to finance or they are a bit condescending – it is a bit like telling the kids what to do and then giving them some pocket money,” one senior policy-maker said.

Related:

Hmmm....Is Luxemburg next? Luxembourg Warns of Investor Flight from Europe

IMF Pushes Plan to Plunder Global 'piggybanks' - Taxing Our Way out of—or into? Trouble.

IMF Pushes Plan to Plunder Global 'piggybanks' - Taxing Our Way out of—or into? Trouble.HT: thenewamerican.com

A controversial report released this month by the International Monetary Fund outlines schemes to have big-spending governments with out-of-control debts plunder humanity’s wealth using a mix of much higher taxes and outright confiscation. The goal: Prop up Big Government. Because people and their assets are generally mobile, the radical IMF document, dubbed “Taxing Times,” also proposes measures to prevent them from escaping before they can be fleeced. Of course, the real problems — debt-based fiat currency, lawless bank bailouts, and a cartel-run monetary system — are virtually ignored.

Pointing to absurd and rising levels of government debt, as well as increasing income inequality, the IMF document suggests there are few remaining options for desperate policymakers to explore. Two that are mentioned include “repudiating public debt” — in other words, defaulting on government bonds — or “inflating it away” by having privately owned central banks conjure even more gargantuan amounts of fiat currency into existence at interest. Both of those plots, of course, would still represent a massive transfer of wealth.

However, even though it hides behind the passive voice, the IMF preference for dealing with the debt problems appears to be simply confiscating the wealth more directly. “The sharp deterioration of the public finances in many countries has revived interest in a capital levy, a one-off tax on private wealth, as an exceptional measure to restore debt sustainability,” the report claims. “The appeal is that such a tax, if it is implemented before avoidance is possible, and there is a belief that it will never be repeated, does not distort behavior (and may be seen by some as fair).”

Reducing government debt ratios to “pre-crisis levels” seen at the end of 2007 — before the multi-trillion-dollar banker bailouts and ramping up of the lawless currency printing at central banks — will require “sizeable” tax rates, the IMF continues. Citing a sample of 15 euro-area nations, the report claims that all households with positive net wealth — anyone with more assets than debt, in essence — would have to surrender about 10 percent of it. Because many people who lived responsibly and saved would try to avoid the looting of their wealth, drastic measures must be considered to stop them.

“There is a surprisingly large amount of experience to draw on, as such levies were widely adopted in Europe after World War I and in Germany and Japan after World War II,” the IMF report notes. 

“This experience suggests that more notable than any loss of credibility was a simple failure to achieve debt reduction, largely because the delay in introduction gave space for extensive avoidance and capital flight, in turn spurring inflation [sic].”

By proposing the outright confiscation of middle-class wealth, analysts say the IMF is essentially acknowledging that simply looting “the rich” will not be enough to even restore government debt to “sustainable” levels.
Still, the non-establishment “rich” would face by far the most ferocious assaults on their assets under the schemes outlined in the radical IMF report, which was promptly celebrated by Big Government-supporting politicians.

Noting that financial wealth and people are mobile, the document suggests that there “may be a case” for confiscating varying amounts of wealth using various means — all depending on how easy it would be for people to protect the assets in question from legalized looting. “Substantial progress likely requires enhanced international cooperation to make it harder for the very well-off to evade taxation by placing funds elsewhere,” the report says matter-of-factly.

Taxes on the “rich” of around 60 percent to 70 percent, according to the IMF, would likely be the rate at which the most plunder could be extracted for desperate governments. “A revenue-maximizing approach to taxing the rich effectively puts a weight of zero on their well-being,” the report explains, calling that notion “contentious.” “If one attaches less weight to those with the highest incomes, the vote would be to increase the top marginal rate.”

Private companies that try to reduce their already-crushing tax burdens using “tax planning schemes,” as the report calls them, are also in the IMF crosshairs for increased wealth confiscation. In a section headlined “Tricks of the Trade,” for example, the document blasts business efforts to provide services directly from “low-tax jurisdictions” as “abusive.”

In essence, the IMF and other taxpayer-funded international institutions hope to see a stronger global regulatory regime to ensure maximum wealth extraction via corporate taxation, too. “The chance to review international tax architecture seems to come about once a century; the fundamental issues should not be ducked,” the report argues.

The devastating consequences of squandering ever-greater amounts of productive capital on government programs, of course, are largely overlooked. Meanwhile, the unspoken assumption underpinning the radical ideas is essentially that companies exist to produce wealth for governments to spend — rather than value for shareholders and consumers as has traditionally been the case.

Looking past the bureaucratic language, the IMF caveats, its effort to hide behind the passive voice, and the thinly disguised attempt to make the heist sound palatable to the public because not everyone would be fleeced just yet, the message becomes clear. What the IMF is really saying is that the proposed massive confiscation of wealth must be adopted quickly and quietly — before people have a chance escape it.

Among other schemes discussed in the report is “harmonizing” taxes across jurisdictions, a longtime globalist goal pushed by more than a few establishment-run international institutions. To ensure that governments can extract as much wealth as possible from the productive sector of the economy, more cooperation between them is supposedly needed to eliminate tax competition among jurisdictions. After all, if one government sets lower tax rates to attract businesses and capital, other regimes are being deprived of what the IMF appears to believe is rightfully theirs to seize.

While the report has largely escaped the attention of the establishment media, analysts who dug into it were shocked. “It may all sound far-fetched to you now, and most people will still cling on to the idea that ‘they wouldn’t do such a thing’,” noted Raul Meijer in an analysis posted on Market Oracle, suggesting that the Cyprus heist would likely serve as a “blueprint” for future looting — as EU officials promised. “But that the IMF proposes it at all, and so openly, suggests that they might, if only they can figure out how.”

Writing in Forbes, meanwhile, Competitive Enterprise Institute Fellow Bill Frezza highlighted three major takeaways from the report. The first point is that IMF economists understand that even if 100 percent of assets belonging to the “1 percent” were expropriated, there would not be enough to fund today’s governments. “That means that all households with positive net wealth — everyone with retirement savings or home equity — would have their assets plundered under the IMF’s formulation,” Frezza explained.

The second major takeaway, he continued, is that such a “repudiation of private property” would still not be enough to pay off the debts of Western governments or to fund their budgets going forward. Instead, it would merely “restore debt sustainability,” as the IMF put it, allowing governments to keep borrowing until the next crisis strikes — “for which stronger measures will be required, of course.”
Lastly, Frezza explained, if the political class fails to “muster the courage to engage in this kind of wholesale robbery,” the only alternatives offered by the IMF were debt repudiation or hyperinflation. “Structural reform proposals for the Ponzi-scheme entitlement programs that are bankrupting us are nowhere to be seen,” he added.

Concluding, Frezza painted a dire picture of what the future may hold if the would-be looters are not restrained. “Yes, this is where the bankruptcy of the modern entitlement state is taking us — capital controls and exit restrictions so the proverbial four wolves and a lamb can vote on what’s for dinner,” he wrote. “That’s the only way to keep citizens worried about ending up on the menu from voting with their feet.”

In another devastating analysis of the latest IMF report, which was released in mid-October, Ryan Bourne, head of economic research at the Centre for Policy Studies, blasted it for being filled with “left wing” ideas.
“The IMF is playing with fire by giving intellectual backing to punitive taxation,” he said. “Underlying these policies is an ideological assumption that wealth is a collective resource, with governments the benevolent seekers of the common good, whose ability to provide services is undermined by an eroding tax base…. These policies should be anathema to anyone valuing individual freedom, growth and long-term fiscal responsibility.”

For IMF boss Christine Lagarde, however, what the would-be global wealth confiscators are demanding is simply part of formulating a “just” fiscal policy. “It’s clearly something finance ministers are interested in, it’s something that is necessary for the right balance of public finances,” the former French finance boss was quoted as saying during a panel discussion this month. “There are lot[s] of wasted opportunities.”

Of course, the IMF report glosses over the fact that the overwhelming majority of policy changes among advanced economies in recent years went in the direction of tax increases. It also ignored the screaming gorilla in the room: the flawed monetary system and the ludicrous government spending spree at the root of the financial crisis and the ongoing economic problems plaguing the world.

There may be good explanations for that. Despite receiving generous taxpayer-funded salaries and perks, for example, IMF bureaucrats do not pay the exorbitant income taxes they are demanding for everyone else. Meanwhile, the controversial global institution has already been playing a key role in recent heists — with the confiscation of people’s savings in Cyprus among the most stunning examples.
Even more important, perhaps, is the fact that the IMF is being openly groomed to serve as a global central bank in charge of a planetary currency. It already issues the proto-global currency known as Special Drawing Rights, but the establishment has much bigger plans in mind, as The New American magazine has documented extensively. If liberty, prosperity, and national sovereignty are to be preserved, the radical looting schemes advanced by the IMF and other planetary institutions must be resisted in favor of real reforms.
Alex Newman is a correspondent for The New American, covering economics, politics, and more. He can be reached at anewman@thenewamerican.com. 

"Euro heist II" - Poland Confiscates Half Of Private Pension Funds To Cut Sovereign Debt Load.

"Euro heist II" - Poland Confiscates Half Of Private Pension Funds To Cut Sovereign Debt Load.HT: ZeroHedge.

While the world was glued to the developments in the Mediterranean in the past week, Poland took a page straight out of Rahm Emanuel’s playbook and in order to not let a crisis go to waste, announced quietly that it would transfer to the state – i.e., confiscate – the bulk of assets owned by the country’s private pension funds (many of them owned by such foreign firms as PIMCO parent Allianz, AXA, Generali, ING and Aviva), without offering any compensation. In effect, the state just nationalized roughly half of the private sector pension fund assets, although it had a more politically correct name for it: pension overhaul.

By way of background, Poland has a hybrid pension system: as Reuters explains, mandatory contributions are made into both the state pension vehicle, known as ZUS, and the private funds, which are collectively known by the Polish acronym OFE. Bonds make up roughly half the private funds’ portfolios, with the rest company stocks.

And while a change to state-pension funds was long awaited – an overhaul if you will – nobody expected that this would entail a literal pillage of private sector assets.

On Wednesday, Prime Minister Donald Tusk said private funds within the state-guaranteed system would have their bond holdings transferred to a state pension vehicle, but keep their equity holdings. The funds would effectively be left with only the equities portions of their assets, even this would be depleted, and there will be uncertainty about the number of new savers joining.

But why is Poland engaging in behavior that will ultimately be disastrous to future capital allocation in non-public pension funds (the type that can at least on paper generate some returns as opposed to “public” funds which are guaranteed to lose)?

 After all, this is a last ditch step which no rational person would engage in unless there were no other option. Simple: there were no other option, and the driver is the same reason the world everywhere else is broke too – too much debt.

By shifting some assets from the private funds into ZUS, the government can book those assets on the state balance sheet to offset public debt, giving it more scope to borrow and spend. Finance Minister Jacek Rostowski said the changes will reduce public debt by about eight percent of GDP. This in turn, he said, would allow the lowering of two thresholds that deter the government from allowing debt to raise over 50 percent, and then 55 percent, of GDP. Public debt last year stood at 52.7 percent of GDP, according to the government’s own calculations.

To summarize:

1. Government has too much debt to issue more debt
2. Government nationalizes private pension funds making their debt holdings an “asset” and commingles with other public assets
3. New confiscated assets net out sovereign debt liability, lowering the debt/GDP ratio
4. Debt/GDP drops below threshold, government can issue more sovereign debt

And of course, once Poland borrows like a drunken sailor using the new window of opportunity, and maxes out its new and improved limits, it will have no choice but to confiscate more assets, and to make its balance sheet appear better, until one day, there is nothing left in the private sector to confiscate. At that point the limit itself will have to be legislated away, and Poland will simply continue borrowing until one day there are no foreign lenders willing to take the same risk as the nation’s private pensioners. At that point, Poland, which is in the EU but still has the Zloty, can just go ahead and monetize its own debt by printing unlimited amounts of its currency.

Of course, we all know how that story ends.

The response to the confiscation was, naturally, one of shock:

The reform is “a decimation of the …(private pension fund) system to open up fiscal space for an easier life now for the government,” said Peter Attard Montalto of Nomura. “The government has an odd definition of private property given it claims this is not nationalisation.”

“This is worse than many on the markets had feared,” a manager at one of the leading pension funds, who asked not to be identified, told Reuters.

“The devil is in the detail and we don’t yet know a lot about the mechanism of these changes, what benchmarks will be use to evaluate our performance… (It) looks like pension funds will lose a lot of flexibility in what they can invest.”

Catastrophic consequences for fund flows aside, the Polish prime minister had a prompt canned response:

Tusk said people joining the pension system in the future would not be obliged to pay into the private part of the system. Depending on the finer points, this could mean still fewer assets in the private funds.

“The (current) system has turned out to be built in part on rising public debt and turned out to be a very costly system,” Tusk told a news conference.

“We believe that, apart from the positive consequence of this decision for public debt, pensions will also be safer.”

You see, he is from the government, and he is confiscating the pensions to make them safer. Confiscation is Safety and all that…

Polish officials have tried to reassure investors, saying the overhaul avoids the more radical options of taking both bond and equity assets away from the private funds outright.

They say the old system effectively made Polish public debt appear higher than it really is.

Well, once you nationalize private assets, the public debt will lindeed appear lower than it was before confiscation: we give them that much.

End result: “The Polish pension funds’ organisation said the changes may be unconstitutional because the government is taking private assets away from them without offering any compensation…. This may lead to the private pension systems shutting down,” said Rafal Benecki of ING Bank Slaski.”

Unconstitutional? What’s that. But whatever it is, it’s ok – after all the public pension system is still around. At least until that too is plundered. But in the meantime, all such pensions will be “safer”, guaranteed.

But best of all, in the aftermath of Cyprus, we now know what the two most recent European blueprints for preserving the myth of solvency are: bail-ins, which confiscate deposits, and pension fund “overhauls”, which confiscate, well, pension funds.

And now, back to the global recovery soap opera.

CREDIT SUISSE: The End Of Zero Interest Rates May Create A 'Huge Financial Disruption Akin To The End Of A War.

CREDIT SUISSE: The End Of Zero Interest Rates May Create A 'Huge Financial Disruption Akin To The End Of A War.HT:Business Insider

It wasn’t so long ago that the challenge of making money with interest rates stuck around zero was investors’ top concern. Those days are gone. Today, they’re worried about the opposite: the threat that now-rising rates pose for fixed income investments. That, and the downturn in emerging markets that many only recently embraced in the hunt for yield caused by those near-zero rates.

It’s easy to identify the date that things changed: May 22, the day that the Federal Reserve first alerted markets that it might soon start “tapering” the $85 billion in monthly asset purchases it has been making since December to juice the economy. And soon looks to be getting even sooner. A steady improvement in U.S. employment figures—unemployment fell from 7.6 percent in June to 7.4 percent in July—has brought into focus the 6.5 percent unemployment target the Fed set as a prerequisite for raising short-term interest rates. On Thursday, the U.S. Bureau of Labor Statistics released yet another piece of good news on the employment front: New applications for unemployment benefits sank to their lowest levels in six years in July.
That’s great news for Americans who happen to be landing new jobs, but not as pleasant for bond investors worried about rising rates. The employment data, as well as news that inflation rose significantly in July (another potential trigger for the Fed to tighten monetary policy) led investors to dump U.S. Treasuries Thursday, pushing yields to a two-year high. The yield on a 10-year Treasury bond has topped 2.8 percent, about 60 percent higher than at the beginning of the year.
Now that yields have started climbing, investors should expect that improving economic momentum will keep them moving higher – and that will have serious implications for investors in the world’s three largest economies: European Union, Japan and the United States.
“In our view, the potential end of near-zero interest rates is exactly the type of event that can trigger enormous changes in asset prices and capital flows within and across economies,” Credit Suisse’s fixed income strategy team explained in a note this week called ”Zero Isn’t Forever.” “This can create a huge financial disruption akin to the end of a war.”
This particular “war” is ending later than it should have, the team wrote, arguing that long-term interest rates have remained low far longer than the data warranted. Rates in the G3 started falling in mid-2011, when the European crisis was at its worst. But industrial production momentum, a key indicator of global economic activity, started looking more solid as early as last November. Add to that the steady recovery in the U.S. labor market and the receding threat of a breakup of the euro zone since European Central Bank President Mario Draghi’s July 2012 pledge to take any measures necessary to hold the monetary union together, and one would have thought rates would have been climbing some six months before the Fed caused such pandemonium in May. So why didn’t they? Because the major central banks continued easing in the face of that good news, that’s why. 
And why would they do that? Because they were more focused on falling inflation, despite the fact that inflation is a lagging indicator. (If it’s not one thing, it’s another.) The recent jump in long-term rates, then, is simply an overdue correction. “We think long-term interest rates were significantly mispriced even before tapering talk began,” the strategists wrote.
The uptick in industrial production momentum around the world, which tends to track quite closely with long-term bond yields, is still going strong, and the analysts expect it to continue putting upward pressure on rates. Global industrial production momentum went from -1 percent in November to 4.1 percent in May, and the strategists expect it to hit 7 percent by the end of this year, as both Europe’s painful recession and China’s significant slowdown appear to be flattening out.Read the full story here.

Eurozone Funding Shortfall Rises To Over $4 Trillion, Increases By More Than $500 Billion In A Year...But wait Europe has a Plan.

Eurozone Funding Shortfall Rises To Over $4 Trillion, Increases By More Than $500 Billion In A Year...But wait Europe has a Plan.HT: ZeroHedge; Hat4uk.

Back in April 2012, Zero Hedge pointed out something rather disturbing for the European banking sector and defenders of the European monetary myth: the "aggregate shortfall of required stable funding Is €2.78 trillion" which was the number estimated by the BIS' Basel III rules needed to return to some semblance of balance sheet stability in Europe. More importantly, this was a number so big, it was obvious that there was only one way to deal with it: cover it up deeply under the rug and pray it never reemerged.
What happened next was inevitable: Basel III's implementation was delayed as there was no way Europe's banks could satisfy their deleveraging requirements, while the actual capital shortfall hole became bigger and bigger. Today, 16 months later, the FT discovers what Zero Hedge readers knew long ago in "Eurozone banks need to shed €3.2tn in assets to meet Basel III." In other words, not only has Europe not fixed anything in the past year, but the liquidity tsunami injected by the central banks merely taped over the epic capital shortfall that just got epic-er, increasing from €2.8 trillion to €3.2 trillion, an increase of over half a billion to over $4 trillion in one short year.
Sadly, just like back in April 2012, so now, Europe has no hope of actually addressing this much needed deleveraging and so the can kicking will continue until the number rises to $5 trillion, $6, $7 etc until one day the market's "head in the sand" strategy finally fails and every emperor around the world is found to be naked.
From the FT:

Europe’s biggest banks will have to cut €661bn of assets and generate €47bn of fresh capital over the next five years to comply with forthcoming regulations aimed at reducing the likelihood of another taxpayer funded bailout.
The figures form part of an analysis by the UK’s Royal Bank of Scotland – which singles out Deutsche Bank, Crédit Agricole and Barclays as the banks most in need of fresh capital – highlighting that five years on since the financial crisis, Europe’s banks are still “too big to fail”.
Overall, the region’s banks need to shed €3.2tn in assets by 2018 to comply with Basel III regulations on capital and leverage, according to RBS.
The burden is greatest on smaller banks, which need to shed €2.6tn from their balance sheets, raising fears that lending to the region’s small and medium size enterprises will be sharply reduced as a result.
“There is too much debt still across Europe’s economies and the manifestation of that is on bank balance sheets,” said James Chappell, an analyst at Berenberg bank. “The major issue is that the banks still don’t have enough capital to write down those loans.”
Eurozone banks have already shrunk their balance sheets by €2.9tn since May 2012 – by renewing fewer loans, repurchase and derivatives contracts and selling non-core businesses – according to data from the Frankfurt-based European Central Bank.
Deutsche Bank recently said it would seek to cut its assets by about a fifth over the next two and a half years. Barclays, which announced a £5.8bn rights issue last month, said it wants to shrink its balance sheet by £65bn-£80bn.
Europe’s banking sector assets are worth €32tn, or more than three times the single currency zone’s annual gross domestic product.

Of course, if Europe's banking sector actually does take its deleveraging obligations seriously, what will happen to Europe's economy, where private sector loan creation is already at a record low level, will be nothing short of a stunning contraction, unlike anything seen in the past 5 years. And yet, that is precisely the path Europe most take in order to emerge on the other side with a healthy beating financial heart. That it won't is a given because doing the right thing would mean a complete wipe out for the banker oligarchy. And, as always, it will be the common man who will suffer when the forced deleveraging day finally comes.

The PLAN:

 Revealed: official details on how the EU will steal from us.

Three beaming eurocrats – Barroso, Van Rompuy and Lithuanian Dalia Grybauskaite – emerged triumphant from a session two days ago, in which they mapped out the biggest bank heist in world history. This is to put flesh on the eurozone law hastily passed on August 1st (while EU citizens were on holiday) to deal with the inevitability event of a bank collapse. Under this draft proposal – which many expect to be applied to the entire EU – no depositor big or small will in future be able to feel safe with money deposited in a bank. The Slog now calls for those who represent us, across the entire cultural spectrum of European society – to do something.
In a barely read piece a month ago, the International Business Times reported on the rapidly drafted new EU law for “overhauling its policy on how banks receive bumper bailouts”. Be aware: this is an EU move, not a eurozone move: it is already law (it passed on August 1st) and although for now it applies only to the eurozone, it is an EU law. Hardly anyone has commented on this, but the approach being taken matches word for word the 3-card trick George Osborne used six weeks ago when he said:

“In future, taxpayers will not be called upon to bail banks out. It will be down to the creditors and the owners”.

The most remarkable example of double-speak to date, at the time I pointed out that creditors are taxpayers (they’re account holders, simple as that) and so as the Establishments daren’t ask us for higher taxes to bail out their mates in the banking system, they will take it via, if you like, Direct Debit. It is exactly the same principle of stealing the Troika wishes to apply to Greek private pension funds.
The initial piece at the IBT website noted that ‘Eurozone leaders agreed upon the major policy shift and also confirmed that the new rules will help protect the taxpayer and move the burden of bailing out the banks onto shareholders and junior debt holders.” Again, more bollocks: how will ripping your money out protect you? And note – junior debt holders…aka, you and I.

But yesterday from the German site Deutsche Wirtschafts Nachrichten (German Economic News) came a piece reporting that all bets are off as far as the ‘guarantee of all funds under €100,000′ pledge is concerned. Under the current Lithuanian Presidency of Dalia Grybauskaite (seen left between a Trot and a poet), the proposal as drafted – and almost entirely ignored by the Western media – states as follows:
* Treatment will not be the same regardless of size of deposit, BUT small account holders will have to wait up to four weeks to get their money….’depending on how serious the insolvency is’. During that time, there will be a maximum withdrawal of €100-200 per day – again, perhaps less depending on the seriousness of the failure. (Based on the Cyprus experience, the haircut in the end will be at least 60%).
* The EU Parliament – allegedly – is demanding that deposits of €100,000+ euros should be confiscated within five days. (So much for MEPs offering us some kind of protection from the Sprouts).
* In the event of a banking collapse, all previous government commitments are null and void.  The force majeur of “exceptional circumstances” can lead to ways round such pledges. Part of the new plan suggests savers could also be subject to a ‘penalty tax’ if they have less than € 100,000 in the bank. (So much for Merkel’s promise to the German people).
George Orwell could’ve dropped acid and still not come up with a scheme quite so assumptive and brazenly deranged as this one. It is based on the following insane principles:
1. Putting money in a bank makes every citizen a creditor of that bank, equally prone to confiscation in order to repay….who exactly? The answer is, other banks it owed money. So it’s not really our money after all, it’s the banking sector’s money. After it’s been taxed by the Government, despite the fact that we earned it…it’s really all bankers’ money after all. Unbelievable.
2. If we are prudent enough to keep money in smaller amounts in lots of accounts, we will have to pay a ‘penalty tax’ – well of course we will: I mean, given it’s never our money really – we’re just borrowing it, or something – then quite right too. And because it isn’t really our money, we shall be given strictly limited spending money per day. The brass neck is beyond belief.
3. If you have been seditious enough in your life to actually make quite a lot of money legally, then within five days the money that was never really yours will be taken back by its rightful owners…the bankers….or the Government rescuing the bankers but without doing it in our taxes. Why five days – why not five seconds? I mean, it’s their money: we were just earning it for safe keeping, right? Of course we were.
4. Anything is an exceptional circumstance if they say it is. Even the Nazis in 1933 had to burn down the bloody Reichstag to declare a State of Emergency. In 2013, it requires just one dumb, over-leveraged, f**kwitted bank to collapse under the weight of its CEO’s ego, and we’re all pauperised by Law.
This is no longer a political issue. This is a case of one simple rule by which decent citizens must abide: stealing things is wrong…especially when it’s done to repair your own stupid decisions in the past.

"The Great Euro Bank Robbery" - Investors to pay for bank failures – EU.

"The Great Euro Bank Robbery" - Investors to pay for bank failures – EU. HT: RussiaToday.

If pursued, bailout strategy, shareholders, bondholders and depositors with more than 100,000 euro will share the financial strain of saving a bank. Deposits under 100,000 will be protected.

Under the new protocol, which would come into effect in 2018, countries would be obliged to absorb 8 percent of a bank’s liabilities, with some leeway thereafter.
The next time a big bank fails, governments will make sure “that shareholders and creditors are liable first and foremost,” German Finance Minister Wolfgang Schaeuble told reporters.

Rescuing banks will not be less painful for political leaders and institutions, who can now just take bank deposits instead of hiking taxes.
French Finance Minister Pierre Moscovici said France got “what we wanted” from the blueprint, and Danish Economy Minister Margrethe Vestager called the deal a “balanced compromise.”
The Irish, whose taxpayers paid nearly $40 billion to bail out Anglo Irish Bank, are happy that the new status quo will be bail-ins, not bail-outs. Banks will have to bail themselves out.

Other ministers were happy to have a universal strategy to address dealing with troubled banks."If a bank gets in trouble we will now, throughout Europe, have one set of rules on who pays the bill," Dutch Finance Minister Jeroen Dijsselbloem said.

Germany has previously indicated it disagrees with a universal plan to deal with bailouts across the continent, and has warned having such a strong central banking authority goes against standing treaties.
“It took a long time and it was arduous and it was intense,” German Finance Minister Wolfgang Schaeuble said, without publicly voicing Germany’s previous qualms over the structure.
It is highly unlikely Chancellor Merkel will agree to such a banking union before the election in September.
The European Central Bank will officially take over supervision of eurozone banks next year. Last year it provided 1 trillion euros of cheap three-year loans to struggling banks.
Under the new umbrella, banks will be able to receive direct loans from the European Stability Mechanism, a eurozone bailout fund. The European Banking Authority was set up in 2011 to integrate rules across the EU and has secured a new supervisory function. All 17 currency member states support the motion, but some fear an all-too-powerful central bank.
By next week, the 27 member states need to choose a governing body, or executor, to carry out the task.
The legislature’s text grants nations a clear right to nationalize failing banks, if the step is seen as essential to preserve financial stability.
Switzerland, Norway, and other non-EU countries within Europe will still have jurisprudence over how to deal with bank failures.
The precedent was set after Cyprus requested an EU bailout and aid was dependent on the country’s agreement to levee account holders with more than 100,000 euro, which will likely result in a loss of 30 percent in savings.
The Cyprus scenario marked the first time depositors were forced to contribute to the bank’s bailout and now it is set to become the norm.Read the full story here.

"The Great Swiss Bank Robbery" - Switzerland Revises 1934 Banking Act To Allow Bail-In Deposit Confiscations.

"The Great Swiss Bank Robbery" - Switzerland Revises 1934 Banking Act To Allow Bail-In Deposit Confiscations.(SilverDoctors).

The Swiss Financial Market Supervisory Authority (FINMA) has quietly joined the growing parade of western nations who have quietly re-written banking laws to allow depositor bail-ins upon the next banking crisis.
If Switzerland, the once ultimate safe haven for banking deposits across the world is preparing to confiscate depositors funds, there truly is no protection anywhere other than physical gold and silver in your own possession!

In the event that a bank is failing or where its capitalization is no longer adequate, the Swiss Financial Market Supervisory Authority (“FINMA”) may take measures to improve such bank’s financial viability rather than liquidating it. “Loss absorption” and “bail-in” are important instruments to support any such measures.

The Swiss document begins by advising that the FINMA now has legal authority to confiscate depositor funds, thanks to a revision of the Banking Act of 1934, completed in 2011, as well as the revision of the Bank Insolvency Ordinance completed Nov 1st 2012:

In the event that a bank is failing or where its capitalization is no longer adequate, the Swiss Financial Market
Supervisory Authority (“FINMA”) may take measures to improve such bank’s financial viability rather than
liquidating it. “Loss absorption” and “bail-in” are important instruments to support any such measures. This
is now possible as a result of a revision of the Banking Act of 8 November 1934 (the “Banking Act”) in 2011 and
the taking effect of a revised Bank Insolvency Ordinance on 1 November 2012 (the “Bank Insolvency Ordinance”)
and of a revised Capital Adequacy Ordinance on 1 January 2013 (the “Capital Adequacy Ordinance”).

The document states that The Banking Act now grants discretion to FINMA regarding depositor bail-in measures:

RELEVANT PROCEEDINGS Under the Banking Act, if there are concerns that a bank is
over-indebted or if a bank does not meet liquidity or regulatory capital requirements, the FINMA may as appropriate: (i) take protective measures; (ii) initiate bank reorganization
proceedings; or (iii) order the liquidation of the bank (bankruptcy). The Banking Act grants significant discretion to FINMA in this context. This includes, inter alia, ordering
a bank moratorium, a maturity postponement or “bail-in” measures.

And in the scope of bail-in measures, states that bail-ins are to be a measure of last resort (translation: we’ll make this sound unlikely until the banks lose their first franc):

BAIL-IN MEASURES
4.1 Scope
The loss absorption measures described above relate to capital instruments issued by the bank. In addition, the revised procedural rules as specified in the secondary legislation to the Banking Act applicable in a bank reorganization context (i.e. if FINMA believes that the bank may be successfully reorganized or if at least part of the business of the failing bank may be continued), as enacted by FINMA, provide for the competence of FINMA to convert or write-off other
debt (even in the absence of any contractual provision to that effect in the arrangement governing such debt) if and to the extent necessary to allow the bank to meet its regulatorycapital requirements after completion of the reorganization(“bail-in”).

Such bail-in is designed to be available as a measure of “last resort” to be taken in the event that the loss absorption under the capital instruments issued by the bank is not sufficient to restore the required capitalization of the failing bank and if the creditors are likely to be better off than in an immediate insolvency of the bank.The bail-in must be specified in the reorganization plan, which must be approved by FINMA and – except for banks of systemic importance – also by a majority of non-privileged creditors (calculated on the basis of the claim
amounts). If such approval cannot be obtained, the bank would be liquidated in bankruptcy proceedings. In the event that FINMA only applies protective measures, but does not consider any reorganization measures as necessary or adequate, a bail-in could not occur as one of such
protective measures.

Hmmm....Who needs banks with robbers like these guys?Read the full story here.

"What was yours is now OURS" - Obama Proposes Retirement Account Limit In First "Wealth Tax" Salvo.

"What was yours is now OURS" - Obama Proposes Retirement Account Limit In First "Wealth Tax" Salvo.(Zerohedge).The witch-hunt against the "rich" (as defined by a random group of people) through the establishment of creeping global capital controls continues. First, it was Europe deciding that €100,000 in savings is the "fair" threshold on savings above which any haircut goes, with Cyprus demonstrating first. and next Italy making it clear local depositors above the threshold will also be impaired in the future; then a group of journalists mysteriously lands millions in top secret files exposing essentially every offshore bank account: a perfectly legal option, however when mixed in with the implication that this money is all tax-evasion gotten it provides for a combustible mix, and now it is America's turn to fire the first shot across the capital control bow, because as part of his proposed budget, Obama plans to set a limit of how much one can spend per year on retirement through tax-preferred retirement plans. As it turns out, according to the Obama administration it is only fair to spend a total of $205,000 in nominal dollars per year on retirement, but not more.
Per The Hill, "The proposal would save around $9 billion over a decade, a senior administration official said, while also bringing more fairness to the tax code." Ah yes, "fairness."
This means that as a result of the artificial limit, the Budget will set a total cap on retirement plans of about $3 million. Anything above that, feel free to please spend on your peas instead of saving, or just invest in Bernanke's stock market ponzi. After all, that is the only artificial indicator Obama has to point to, when "proving" his policies are working.
Of course, once the administration's destructive policies of attempting to inflate away the debt finally funnel through to the economy, and inflation explodes, that $205,000 may or may not be enough to buy a loaf of bread. But why pretend to even think logically or ahead at this point. It's not like anyone has any real plans about the future of the country when the president is actually willing to release statements like this: “Under current rules, some wealthy individuals are able to accumulate many millions of dollars in these accounts, substantially more than is needed to fund reasonable levels of retirement saving."
Why thank you Mr. President for telling the people what you consider "reasonable." 
Of course, it would be so much below you to simply go on the record as saying the rich (arbitrarily chosen as those who have over $1 million in assets... or $500,000... or $50,000 - who knows, it's "arbitrary") are now fair game and all those who recently received an Obama phone would be legally excused if they were to accidentally eat them. Because all is fair in hate and class warfare.
And speaking of hate, that is precisely the cover that Obama will use to pass his proposal:

The most prominent taxpayer with a multimillion-dollar IRA is Romney, the 2012 Republican presidential nominee and co- founder of Bain Capital LLC. Romney disclosed in public filings during the campaign that his retirement account held between $18.1 million and $87.4 million. At one point, the maximum exceeded $100 million.

IRAs have evolved from a retirement-planning technique into an estate-planning tool for some wealthy families because tax laws allow the accounts to be passed on to heirs, said Ed Slott, an IRA specialist and certified public accountant based in Rockville Centre, New York.

“Over the last election it hit a critical mass when a lot of people found out that Romney had $100 million in his IRA,” Slott said. “People thought, how on earth did that happen? I think that was the tipping point.”

The Romney campaign didn’t explain how he amassed that much money in an IRA when contribution limits are much lower. Most taxpayers can contribute a maximum of $5,500 for 2013. Older workers, self-employed workers and those who save through 401(k)-style plans have higher caps and can roll those accounts into IRAs.

One possibility is that Romney included Bain investments valued at close to nothing that later grew exponentially. The value would increase tax-free in the retirement account and would be subject to taxation at ordinary income tax rates when taken out.

Of course, the outcry from those who are stupid enough to actually save cash instead of blowing it all on iPhones and other worthless gimmicks will be loud, but since they are outnumbered about 9 to 1 by those who have zero financial planning skills, zero savings but lots of debt, will be promptly drowned out.
We wonder if the administration be as forceful in limiting the net present value of public worker retirement pensions (funded by other taxpayers of course), already over $500,000/year in some cases, with the same passion as it has in going after private wealth. Or maybe because the purchasing of votes with other people's money might be impaired, Obama will just let this slide?
Finally, like everything out of the administration, there isn't actually a plan on how to do this:

The administration’s statement didn’t explain in detail how the proposal would work. The cap would apply to the total of all of an individual’s tax-favored retirement accounts.

So all up in the air and very much unknown. But what is very known is that the tax on the wealthy, which by definition has to be global in nature, is rapidly coming, and the only question is at what threshold of total taxable financial assets it will be arbitrarily set.
However since we predicted all of this in September of 2011, and did some math to go along with it, expect to hand over anywhere between 30% and 40% of your hard earned assets to whatever parasitic government happens to be your host (this of course, after being taxed on the cash flows used to generates these assets).
Because in the new socialist international normal, "it's only fair."

Cyprus-Style “Bail-Ins” Are Proposed In The New 2013 Canadian Government Budget!

Cyprus-Style “Bail-Ins” Are Proposed In The New 2013 Canadian Government Budget! HT: Economic Collapse. By Michael Snyder.

The politicians of the western world are coming after your bank accounts. In fact, Cyprus-style “bail-ins” are actually proposed in the new Canadian government budget. 

When I first heard about this I was quite skeptical, so I went and looked it up for myself. And guess what? It is right there in black and white on pages 144 and 145 of “Economic Action Plan 2013″ which the Harper government has already submitted to the House of Commons. 

This new budget actually proposes “to implement a ‘bail-in’ regime for systemically important banks” in Canada. “Economic Action Plan 2013″ was submitted on March 21st, which means that this “bail-in regime” was likely being planned long before the crisis in Cyprus ever erupted. So exactly what in the world is going on here? 

In addition, as you will see below, it is being reported that the European Parliament will soon be voting on a law which would require that large banks be “bailed in” when they fail. In other words, that new law would make Cyprus-style bank account confiscation the law of the land for the entire EU. 

I can’t even begin to describe how serious all of this is. From now on, when major banks fail they are going to bail them out by grabbing the money that is in your bank accounts. This is going to absolutely shatter faith in the banking system and it is actually going to make it far more likely that we will see major bank failures all over the western world.

What you are about to see absolutely amazed me when I first saw it. The Canadian government is actually proposing that what just happened in Cyprus should be used as a blueprint for future bank failures up in Canada.
The following comes from pages 144 and 145 of “Economic Action Plan 2013″ which you can find right here. Apparently the goal is to find a way to rescue “systemically important banks” without the use of taxpayer funds…

Canada’s large banks are a source of strength for the Canadian economy. Our large banks have become increasingly successful in international markets, creating jobs at home.
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.

So if taxpayer funds will not be used to bail out the banks, how will it be done? Well, the Canadian government is actually proposing that a “bail-in” regime be implemented…

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.

So if the banks take extreme risks with their money and lose, “certain bank liabilities” (i.e. deposits) will rapidly be converted into “regulatory capital” and the banks will be saved.
In other words, the banks will just be allowed to grab money directly out of your bank accounts to recapitalize themselves.
That may sound completely and utterly insane to us, but this is how things will now be done all over the western world.
Sometimes a “bail-in” can be done by just converting unsecured debt into equity, but as we just saw in Cyprus, often when there is a major bank failure a lot more money is required to “fix the banks” than can possibly be raised by converting unsecured debt into equity. That is when it becomes very tempting to dip into uninsured back accounts.Read the full story here.

Hmmm....Is Luxemburg next? Luxembourg Warns of Investor Flight from Europe

Hmmm....Is Luxemburg next? Luxembourg Warns of Investor Flight from Europe.(Spiegel).
The debate over this week's "bail in" of bank account holders in Cyprus as part of the country's debt crisis bailout is continuing to simmer in Europe. In Luxembourg, Finance Minister Luc Frieden has warned that the example set in Cyprus by taxing people holding €100,000 ($129,000) or more in their accounts could drive investors out of Europe.

"This will lead to a situation in which investors invest their money outside the euro zone," he told SPIEGEL. "In this difficult situation, we need to avoid anything that will lead to instability and destroy the trust of savers."

Earlier this week, Euro Group President Jeroen Dijsselbloem sparked an enormous controversy after stating that the solution found in Cyprus could be applied throughout the euro zone in the future.

The remark triggered immediate criticism from his predecessor as head of the Euro Group, Luxembourg Prime Minister Jean-Claude Juncker. "It disturbs me when the way in which they tried to resolve the Cyprus problem is held up as a blueprint for future rescue plans," Juncker told German public broadcaster ZDF earlier this week. "It's no blueprint. We should not give the impression that future savings deposits in Europe might not be secure. We should not give the impression that investors should not keep their money in Europe. This harms Europe's entire financial center."

Hmmmm.....yesterday Reuters: "Hands off our banking sector, Luxembourg tells euro zone." seems they know they're on the 'Hit List'.Read the full story here.

Related: MFS on Wednesday - "The Great Euro Bank Robbery" - Hands off our finance sector, Luxembourg warns

Hmmmm.....As i wrote on Monday: Reading material Here:

Euroclear Bank is subject to effective regulation, supervision and oversight of the NBB and FSMA, but cooperation with the Luxembourg authorities should be improved.

The legal framework provides the Belgian authorities with sufficient powers to obtain timely information and induce change.
However, as Euroclear Bank is in competition with the Luxembourg based Clearstream Banking Luxembourg—which offers similar settlement and banking services––close cooperation with the Luxembourg authorities is needed to avoid any competition on risk management frameworks.

As both entities are highly relevant for the global financial stability the Belgian and Luxembourg authorities should evolve from the existing cooperation towards a cooperative framework that would allow them to take common decisions and implement these simultaneously in both entities.

The plans to include Euroclear Bank on the list of eligible banks for the SSM may further contribute to a level playing field.

77. The national securities depositories of Belgium, France, and the Netherlands, that share a common IT platform provided by the Euroclear Group, are subject to effective regulation, supervision, and oversight of the Belgian, Dutch, and French authorities, despite the fact that the legal frameworks differ substantially between the three countries. The cooperation between the different authorities is effective and contributes to the financial stability in Belgium, France, and the Netherlands. Crisis management frameworks are in place that are regularly tested and updated

Video - Ezra levant "Eurozone fail."

"Happy Easter" The EU Took €100 Million from the Cypriot Greek Orthodox Church.

"Happy Easter" The EU Took €100 Million from the Cypriot Greek Orthodox Church.(Cyprus Mail).

This so-called “bail-in” designed only to protect the hedge funds of the European and British money center banks scalped the one entity which could help the poor during the nations transition from quasi-capitalism to European serf state. From the article in today’s paper:

The Church stands to lose more than 100 million euros in the bailout deal reached with international creditors early Monday, its leader Archbishop Chrysostomos said.

“The capital owned by the Church, which was over 100 million euros, has been lost,” the archbishop told reporters.

“There will be many difficulties, some will lose their jobs, the hungry will be multiplied and the Church has to take care of people,” he added.

Granted, I’m sure they won’t suffer at the top of the church as in the old Vatican tradition, the Greek Orthodox Church has been known to enjoy ornate lifestyles and investments which per the article range from breweries (yes, that’s correct) to hotels and resorts. The bigger picture is that the European Union using the power of the ECB and IMF combined has now found a formula not just to create vassal states, but to seize the assets of the Church, something the atheistic Marxists which created the Eurozone have fantasized about for over a decade.

This action should make the Vatican extremely nervous about their massive Italian and Spanish property holdings in those nations.

John Galt: When this program is translated into an American version, look for only those “Federally approved” institutions to be exempt from property and capital seizure. Three is no better formula to force a religious institution to pay taxes and force compliance with the political elite’s prevailing point of view to extinguish the concept of freedom of expression.Read the full story here.

"The Great Euro Bank Robbery" - Cyprus Popular Bank’s large deposit holders could face 80% cut.

"The Great Euro Bank Robbery" - Cyprus Popular Bank’s large deposit holders could face 80% cut.(RT).

Cyprus Popular Bank’s richest clients with uninsured deposits over €100,000 could get only 20% of their money, as the government eyes to wind down its operations, says Finance Minister Michalis Sarris.

"Realistically, very little will be returned," Sarris said in a televised interview with state broadcaster CyBC, adding that it could also take years before those depositors see any of their money back.

“Certainly, for depositors above 100,000 euros it could be a very significant blow," Sarris concluded.

Earlier it was reported the losses facing large depositors at Bank of Cyprus could reach as much as 40%.

The island’s second biggest lender, Cyprus Popular Bank (Laiki), has faced the most serious troubles amid the crisis. Its healthy part will merge into the Bank of Cyprus transferring a debt of 9.2 billion euros and leaving around 8 thousand employees in Cyprus and abroad without work.

Russian companies and businessmen, who between 2007 and 2011 transferred around $135 billion to Cyprus seem to be the most affected.

On Wednesday, the Russian state-owned Bank for Development and Foreign Economic Affairs announced plans to work out a way to help Russian firms with money in Cyprus. Usually the bank helps only too-big-to-fail companies.

Meanwhile, the US-based credit agency Moody's has said the Cyprus crisis puts extra pressure on the Eurozone's downgrade-threatened sovereign ratings, and shows policy makers overestimated their ability to contain the crisis. Market analysts fear that could set a dangerous precedent for future rescue efforts and make the region more prone to bank runs if depositors in other debt-strained countries think their money is no longer safe.Hmmmm......At which time will people say "ENOUGH" of that Euro communism?I hope people with deposits in Luxembourg learned their lesson and have an Easter 'banking trip' to Luxembourg. Read the full story here.

"The Great Euro Bank Robbery" - Hands off our finance sector, Luxembourg warns

"The Great Euro Bank Robbery" - Hands off our finance sector, Luxembourg warns.(HD).

Luxembourg railed on Wednesday against what it fears is a new eurozone position that oversized finance sectors must be scaled back in line with national economic output following the Cyprus banking debacle.

Former Eurogroup chairman Jean-Claude Juncker's government is "concerned about recent statements and declarations that were made since the crisis in Cyprus sharpened", a news release said.

Specifically, it rejects "general assessments of the size of the financial sector in relation to a country's GDP (gross domestic product) and the alleged risks this poses for economic and fiscal sustainability".

The government said the Luxembourg finance sector acts as "an important gateway for the euro area by attracting investments and thus contributing to the general competitiveness of all member states".

Juncker's successor as eurozone head, Dutch Finance Minister Jeroen Dijsselbloem, has said that the Cypriot financial sector was too big compared with the country's overall gross domestic product, a problem that has forced Cyprus to break up one Cypriot bank and downsize another in exchange for an international bailout worth 10 billion euros ($13 billion).

While few eurozone economies depend on the banking sector as heavily as Cyprus does, Berenberg Bank economists noted on Monday that bank assets in three other eurozone countries were bigger as a percentage of gross domestic product than in Cyprus, where they amounted to more than 700 percent of GDP in 2011.

In Luxembourg, the percentage was an astounding 2,500 percent, the economists said, while in Ireland they were more than 800 percent and in Malta close to 800 percent. The eurozone average was given as 360 percent.

"The financial sector is oversized compared to the rest of our economy," a senior Luxembourg government official nevertheless told AFP on condition of anonymity.

And yet, European Union Markets Commissioner Michel Barnier was quick to insist earlier this week that "the problem is not Luxembourg -- it was certain banks in Ireland, in Spain, in Portugal." One of six founding members of the EU, Luxembourg is one of just four eurozone states -- alongside Germany, the Netherlands and Finland -- to have maintained a triple-A classification with all three major global credit rating agencies Moody's, Fitch and Standard and Poor's.

Its debt-to-GDP ratio is in the region of 20 percent -- compared to a target 120 percent for bailed-out partners -- and its deficit is well within the regularly-ignored EU threshold of three percent.

Yet Luxembourg has increasingly come under an EU microscope in post-global financial crisis legislative clean-up action, primarily for its culture of banking secrecy.Read the full story here.

Hmmmm.....As i wrote on Monday: Reading material Here:

Euroclear Bank is subject to effective regulation, supervision and oversight of the NBB and FSMA, but cooperation with the Luxembourg authorities should be improved.

The legal framework provides the Belgian authorities with sufficient powers to obtain timely information and induce change.
However, as Euroclear Bank is in competition with the Luxembourg based Clearstream Banking Luxembourg—which offers similar settlement and banking services––close cooperation with the Luxembourg authorities is needed to avoid any competition on risk management frameworks.

As both entities are highly relevant for the global financial stability the Belgian and Luxembourg authorities should evolve from the existing cooperation towards a cooperative framework that would allow them to take common decisions and implement these simultaneously in both entities.

The plans to include Euroclear Bank on the list of eligible banks for the SSM may further contribute to a level playing field.

77. The national securities depositories of Belgium, France, and the Netherlands, that share a common IT platform provided by the Euroclear Group, are subject to effective regulation, supervision, and oversight of the Belgian, Dutch, and French authorities, despite the fact that the legal frameworks differ substantially between the three countries. The cooperation between the different authorities is effective and contributes to the financial stability in Belgium, France, and the Netherlands. Crisis management frameworks are in place that are regularly tested and updated.