BOE’s Carney’s DIESELBOOM: Policy-Makers Working Diligently to Devise an International “Bail-In” Regime

bail-inOutgoing Bank of Canada Governor (& Goldman alum and incoming BOE Governor) Mark Carney just released an epic Freudian slip today during a televised speech in Washington regarding the Western financial system’s co-ordinated move from bailouts to bail-ins as official policy to future bank crises.

It’s one thing when the editor of an obscure financial blog discovers bail-in language written into policy by the Fed, Bank of England, the Bank of Canada, Italy, & New Zealand and it goes viral throughout the alternate financial blogosphere, and it is another thing entirely when the incoming head of the Bank of England himself accidentally lets slip that Western financial policy-makers are working diligently to devise an international “bail-in” regime to prevent big bank failures.

Mark Carney’s DIESELBOOMesq retraction in 3…2…1….

 

As Yahoo Finance Canada reports:

Mark Carney says policy-makers are working diligently to devise an international “bail-in” regime to prevent big bank failures, but he offered no guarantee that individual deposits would be protected.

The Canadian central banker, who is a few months away from heading the Bank of England, says banks must have a set of buffers in place to draw on in an emergency.

No worries however according to Carney, as it is “hard to fathom” why it would be necessary to dip into depositors accounts, while at the same time refusing to rule out the confiscation of accounts under deposit insurance limits:

Carney did not answer whether there should be a total hands-off treatment to non-secured accounts as well, which in Canada would mean deposits over $100,000.

Still, Carney says Canadians should not lose any sleep over the safety of their deposits.

He says Canadian institutions have sufficient capital and other buffers in place making it hard to fathom why it would be necessary to dip into deposits.

 

We are fairly certain that 2 months ago it would have been hard for Cypriots to fathom that their deposits would be confiscated by the ECB/IMF.

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