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Bis Lays Out Blue Print For Future Bail Outs.....sans Taxpayer Cash And Over The Weekend.

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think of the "weekend working" Bonus for your £1M salaried execs....

amazing plan...a bank would write off its debts to its owners.....and thats good.

Or, maybe its what they should have done all along.

Of course, only large depositors would be affected....and its a shame about the bond holders...but but, I thought it was the bond holdings that are the very things that would cause a cascade failure....

Edited by Bloo Loo

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Under the template laid out by BIS, which is termed a creditor-funded recapitalization mechanism, the bank would undergo a forced recapitalization by its creditors when it reaches the point of failure.

The ownership of a bank would be transferred to a newly created temporary holding company over a weekend. The bank is then immediately recapitalized by writing off the claims of creditors.

Am I right in thinking the above implies every one looses their deposits ? as they would be deemed a creditor or are they talking bond holders

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No it states clearly that deposit guarantees would still be in effect.

Basically, THIS IS WHAT WAS SUPPOSED TO HAPPEN ALL ALONG.

The only reason it didn't was because of fear it would cause contagion in the bond markets or trigger a system default.

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No it states clearly that deposit guarantees would still be in effect.

Basically, THIS IS WHAT WAS SUPPOSED TO HAPPEN ALL ALONG.

The only reason it didn't was because of fear it would cause contagion in the bond markets or trigger a system default.

The ``insured`` part is up to £85k I take it

The £85k limit is normally described as a guarantee and not insured

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The ``insured`` part is up to £85k I take it

The £85k limit is normally described as a guarantee and not insured

It's not insurance. It's a government guarantee. If a bank goes pop the gov pays out then other banks have to cough up to cover it.

If it was insurance then few banks could afford the premiums, and it would be impossible to find someone to cover the liability.

Ironically if it was actual insurance, we wouldn't have had all this stupid risky lending.

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  • 243 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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