Is the EU planning fast access to savers’ money?

“Cyprus” was just a ”tryout”, that is a message to us from Brussels. The grab for the investor community’s money is now in preparation in Europe. “… in order to have the possibility to strike suddenly and without a warning”, is added smugly. In fact, rumors and indications are increasing that the EU is preparing guidelines for a “Blitz” access to the bank accounts. In other words: In order to prevent the banking crisis in Europe leading to a crash, compulsory savers’ and depositors’ investments will be executed much faster than during the “test run” in Cyprus. Goal: pull through the bank rescue in a single weekend. The normal bank customer will realize as late as Monday morning that his account was debited during the weekend.
If we can believe the intensifying rumours that the EU is already working on a master plan to involve the account holders in the bank recoveries. Internally, this means to the EU that a plan has to be worked out, at full speed, for the accelerated bank restructuring. Here the specifications: From Friday evening to Monday, the whole procedure could be completed. Ideally, the account holdery do not even notice it, because no earlier than Monday morning they would see that their account was debited. The experts in Brussels want to prevent triggering off a run on the banks or that the banks have to be temporarily closed. Optimists among the driving forces in Brussels even expect already this year an according directive to be adopted.
The biggest question mark: The amount of deposit insurance which, up to the present, was always put in the first line. So far, all Europeans had thought that their deposits were automatically backed up for an amount of EUR 100,000. No way: In reality, nothing is generally secure. And the banks are already threatening that they will no longer continue to pay into a nebulous deposit insurance. In fact, savers have been involved in the risk of a bank for many years already, both as savers, as well as bank shareholders. For years, there has been an EU directive on deposit guarantee – and this actually involves clearly a retention of 10% for savers. So, all savers would ultimately have to participate in the restructuring of their bank with 10% of their deposits. And whether this is the matter of a one-time “delivery”, is written in the stars.
One expert even admits frankly: There will certainly be “hedging techniques”. The most common one would be to convert all savings into cash. But first, interests are not paid, there is a risk of mandatory exchange with “fees” to be collected, and such cash storage is also problematic. By no means should it be kept in bank safes, because they will be locked simultaneously and will be subject to an official declaration of bankruptcy, with meticulous inspection and catalogasation by officials. The same is true for the flight into gold and silver. Leaving it in gold paper or silver paper, a confiscation is possible at any time, all the same. The flight into land and real estate – since immobile – will also be a safe prey for the greedy institutions. And the physical possession outside a bank safes also has its problems. That means for savers, the word asset maintenance clearly gains a really new significance!     •

Source: “Vertraulicher Schweizer Brief” (Swiss Confidential Letter) No. 1431 of 22.5.2015.

(Translation Current Concerns)