Switzerland, the land of the honest banker and honest banks, is following the path of the rest of the world by allowing “bail-ins.” Bail-ins, for those who may still now know, are what was demanded in Cyprus in order to get an ECB bailout. Bail-ins are the confiscation of all or part of bank deposits held by private individuals and corporations in a troubled bank (or banking system).
When the Swiss resort to such chicanery and theft, it is a likely sign that the financial system is irreparable. Governments seem to be recognizing that their prior efforts have not worked and cannot work and that another, bigger crisis lies ahead.
The laws being reversed in Switzerland have been on the books since 1934. Reports are that similar actions have quietly taken place in the US banking system. The notion that banks are a safe repository for your funds is rapidly being dispelled. Banks no longer appear safe.
Your mattress or traditional stores of wealth like gold appear to be the only safe alternatives. Does anyone think that the recent take-down of gold was not, at least partially, aimed at damaging this alternative? Can you have bank runs if there is no place to run?
Here is the Silver Doctors report on the Swiss change:
The Doc * Silver Doctors
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 MarketSupervisory Authority (“FINMA”) may take measures to improve such bank’s financial viability rather thanliquidating 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: