EU Plan Lets Banks Take Deposits in Crisis

The European Central Bank has unveiled a new set of banking plans that will allow failing banks to freeze their deposits in the event of an economic catastrophe to prevent further bank failures.

 

The European Central Bank has unveiled a new set of banking plans that will allow failing banks to freeze their deposits in the event of an economic catastrophe to prevent further bank failures. Continue reading

IMF Issue Working Paper on Eliminating Cash

 

The International Monetary Fund (IMF) in Washington has published a Working Paper on “de-cashing” the economies and the implications. This paper clearly demonstrates that this is the direction we are headed into. It provides advice to governments who want to join in the latest thing – abolishing cash. IMF-Analyst Alexei Kireyev recommends in his conclusions: Continue reading

China hacked the FDIC – and US officials covered it up, report says

China’s spies hacked into computers at the Federal Deposit Insurance Corporation from 2010 until 2013 — and American government officials tried to cover it up, according to a Congressional report.

The House of Representative’s Science, Space and Technology Committee released its investigative report on Wednesday.

It presents the FDIC’s bank regulators as technologically inept — and deceitful. Continue reading

The ‘Inevitable War’ Between the U.S. and China

https://i2.wp.com/s.newsweek.com/sites/www.newsweek.com/files/styles/full/public/2016/03/02/philippines-says-china-blocking-access-south-china-sea-atoll..jpg

Chinese soldiers of the People’s Liberation Army Navy stand guard in the Spratly Islands, known in China as the Nansha Islands, on February 10. The Spratlys are the most contested archipelago in the South China Sea. Stringer/Reuters

 

Roughly 15 years ago, a Chinese fighter jet pilot was killed when he collided with an American spy plane over the South China Sea. The episode marked the start of tensions between Beijing and Washington over China’s claim to the strategic waterway. So in May, when two Chinese warplanes nearly crashed into an American spy plane over the same area, many in China felt a familiar sense of nationalist outrage. “Most Chinese people hope China’s fighter jets will shoot down the next spy plane,” wrote the Global Times, China’s official nationalist mouthpiece.

Though little talked about in the West, many Chinese officials have long felt that war between Washington and Beijing is inevitable. A rising power, the thinking goes, will always challenge a dominant one. Of course, some analysts dismiss this idea; the costs of such a conflict would be too high, and the U.S., which is far stronger militarily, would almost certainly win. Yet history is riddled with wars that appeared to make no sense. Continue reading

Cash Withdrawal Limits and “Bank Holidays” Coming?

Collapsing commodities prices, erratic market turmoil and the bursting of Chinese bubbles are leading to a crisis in confidence in the economic system across the globe. The long-expected crisis to which the global financial and systemic crisis in 2008 may have been a mere prelude may be upon us.

Governments have no appetite for further bailouts. The EU states have passed legislation which will make the banks or rather unfortunate and unsuspecting depositors liable for the bank’s lending and speculative profligacy. Continue reading

The FDIC’s Plan to Raid Bank Accounts During the Next Crisis

The financial system is predominantly comprised of digital money. Actual physical Dollars bills and coins only amount to $1.36 trillion. This is only a little over 10% of the $10 trillion sitting in bank accounts. And it’s a tiny fraction of the $20 trillion in stocks, $38 trillion in bonds and $58 trillion in credit instruments floating around the system.

Suffice to say, if a significant percentage of people ever actually moved their money into physical cash, it could very quickly become a systemic problem.

Indeed, this is precisely what caused the 2008 meltdown, when nearly 24% of the assets in Money Market funds were liquidated in the course of four weeks. The ensuing liquidity crush nearly imploded the system. Continue reading

Greece imposes capital controls, banks to remain shut

Greek banks will remain shut for an unspecified time and the country is imposing restrictions on bank withdrawals following a recommendation by the Bank of Greece, the country’s prime minister said Sunday.

Sunday’s move comes after two days of long lines forming at ATMs across the country, following Prime Minister Alexis Tsipras’ sudden decision to call a referendum on creditor proposals for Greek reforms in return for vital bailout funds. Continue reading

ECB not sure if Greek banks will open Monday as outflows hit 2 billion euros in just three days

LUXEMBOURG — The European Central Bank told a meeting of euro zone finance ministers on Thursday that it was not sure if Greek banks, which have been suffering large daily deposit outflows, would be able to open on Monday, officials with knowledge of the talks said.

Greek savers have withdrawn about 2 billion euros from banks over the past three days, with outflows accelerating rapidly since talks between the government and its creditors collapsed at the weekend, banking sources told Reuters. Continue reading

Greece could be forced to lock down savers’ cash as debt crisis worsens

Greece’s central bank has issued the clearest warning yet that the country is on course to default on its sovereign debt at the end of the month and crash out of the single currency, while finance ministers across Europe also confirmed they are making contingency plans for a messy ending to the crisis.

Athens is due to repay €1.6bn to the International Monetary Fund on 30 June but will be unable to do so unless its creditors release a €7.2bn bailout payment before then. Continue reading

Greek Bank Deposits Bleeding Worsens in April

Deposits hit their lowest level since 2004

Deposit withdrawals from Greek lenders gathered pace in April, as a standoff between the country’s anti-austerity coalition and its creditors has renewed doubts about the country’s future in the euro area.

Deposits by households and businesses fell to to 133.7 billion euros ($146.7 billion) in April from 138.6 billion euros in March, a 3.6 percent monthly drop, and over €100 billion below the September 2009 peak, the Bank of Greece said today. The drop brings total outflows since the start of an election campaign which catapulted anti-bailout Syriza party to power, to 31 billion euros, or 18.8 percent of total deposits. Continue reading

The Death of Cash

Could negative interest rates create an existential crisis for money itself?

JPMorgan Chase recently sent a letter to some of its large depositors telling them it didn’t want their stinking money anymore. Well, not in those words. The bank coined a euphemism: Beginning on May 1, it said, it will charge certain customers a “balance sheet utilization fee” of 1 percent a year on deposits in excess of the money they need for their operations. That amounts to a negative interest rate on deposits. The targeted customers—mostly other financial institutions—are already snatching their money out of the bank. Which is exactly what Chief Executive Officer Jamie Dimon wants. The goal is to shed $100 billion in deposits, and he’s about 20 percent of the way there so far. Continue reading

The Full Explanation Of How The ECB Broke Europe’s Bond Market

It was almost three years ago to the day when Zero Hedge first explained the biggest problem facing Europe when it comes to unconventional monetary policy: the lack, not scarcity, but outright shortage of collateral.

Initially, our focus was on private-sector collateral, and if one had to summarize the key difference between the US and Europe in one chart, it would be this one, showing that while in the US the split between secured and unsecured funding was roughly even, in Europe, some 90% of corporate funding was on bank loan books, with only 10% in the form of (unsecured) corporate bonds (which also explains why in Europe NPLs, aka bad bank debt is by far the biggest problem facing the financial industry). Continue reading

China to Set Up Satellite, Radar Network to Strengthen Maritime Power

Beijing:  China will set up an offshore observation network, including satellite and radar stations, to strengthen the country’s maritime power, the official China Daily reported on Friday, in a move that could exacerbate tensions in the region.

Many of China’s neighbours, including Japan, the Philippines and Vietnam, have expressed concern at China’s military build-up and increasingly assertive posture in the region. Continue reading

China builds military airstrip on disputed island

The newly built facility stretches across Woody Island, part of the Paracel chain, China’s Xinhua news agency said late Tuesday.

The Paracels are also claimed by Vietnam and Taiwan, and tensions between Beijing and Hanoi rose this year over Chinese construction and oil exploration there.

The runway is Beijing’s latest physical assertion of control in the area, two years after it declared a city named Sansha centered on Woody Island — known as Yongxing in Chinese — to administer vast swathes of the South China Sea. Continue reading

%d bloggers like this: