How Bank Levies Improve Financial Stability

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Despite what the markets are indicating, top economists unanimously agree that Trump is decimating the fundamentals of the US economy, by tearing up important trade deals like the TPP, threatening thousands of undocumented workers with deportation and drafting the most irresponsible tax plan in history. As Trump continues to undo Obama’s economic progress, many think that another financial crisis may be looming over the horizon, and that new measures may be needed to protect our financial institutions in this event.

In 2013, Cyprus was forced to restructure its banking sector, after some extreme financial turbulence caused by speculators. After negotiating the terms for a bailout from the EU and IMF, world leaders agreed that depositors with more than 100,000 Euros should be forced to take a modest ‘haircut’ of 47.5% of their deposits, to be invested in bank shares. The success of this bail-in caught the eye of monetary officials around the world, and many economists now recommend bank deposit levies as a highly effective measure to mitigate financial crises. 

After the 2007-08 financial crisis, many bank shares that looked like they were on the verge of bankruptcy, showed double and triple digit returns in subsequent years. If depositors had been forced to invest a portion of their deposits in these bank shares, many of them would have become rich. Studies have also shown that when depositors are forced to underwrite the shares of their bank, the entire financial system is more stable and willing to make loans to small businesses.

Everyone recognizes that fiscal and monetary stimulus is essential for long term economic growth. Now it’s time for us to recognize the similar benefits of bank levies, and start implementing a comprehensive set of policies forcing depositors to take a haircut in the event of a financial crisis. Depositors may not be thrilled about this policy, but the reality is that everyone will benefit as a result. Bank levies are just simple economics. 

Pbier

Outstanding wisdom, MDB. The People is too big to fail and needs to be invested in banks for its own good.

hungrypirana
hungrypirana

That’s right: announce this policy, then watch the run on banks. Thankfully Trump knows better than acting on this nonsense. #winning

drb6
drb6

Runs on the banks will be prohibited by law.

I also think that all deposits that are in banks should be declared the property of the respective bank. After all, most banks are doing God’s work and everyone should chip in to help them!

Make my votes count
Make my votes count

MDB Technically what you propose is already taking place here in the USA but in more of a stealth mode. There was a time when Companies offered retirement benefits to their employees. They took dollars and gave it to banks to invest and those would be paid back to employees via a pension. Employees were guaranteed a retirement benefit. Most government employees still have this promise.

Now most private companies will match a percentage of what an employee is willing to gamble in the stock market via 401k/403b’s. Those investment options are often limited by the bank the company selects and fee’s are paid by the employee. This account is what employees may have to draw from at their retirement. All risk is now assumed by the employee.

Some would like to do the same with SS benefits. How can we lose?

carbon trader
carbon trader

This article is incomplete. Those with hair will get a 47.5% haircut of their deposits. If you are bald, 47.5% of your scalp will be removed, to support our financial system.

I know this since we have been trading carbon for generations. Shylock, the Jew, is our inspiration. Our forefathers traded lively, wholesome forms of carbon, the slaves to work in plantations. Then we had indentured coolies from Asian countries for sugar and rubber plantations. Lost heavily during WW2, since Hitler failed to deliver on his promise of providing 6 million lampshades and soap. But we have made it all up with global warming.
Gotta go now, have to pull chunks of carbon from the progressive elites for trading. Real heavy demand for carbon these days.

Snowflake killa
Snowflake killa

Roflmmfao. Does mdb have a job? House? That’s the stupidest argument yet for wealth redistribution. You don’t even try to sell it any more. Trumps got jobs in the way, and the biscuit wheels are about to fall off the gravy train. You better be prepared. The word food today is J..O..B….

Snowflake killa
Snowflake killa

If I throw my change in the ground outside Popeyes to watch the bums(progressives) right for it, does that make me slightly accredited? Just wondering.

FULL BLACK
FULL BLACK

This article would make sense “IF” the Federal Reserve ( which is about as federal as Federal Express ) never existed. The US dollar has lost 97% of it’s buying power since the Federal Reserve came onto the scene in 1913.

drb6
drb6

Loan is not property yet…it is a step forward, but we need to do more to help bankers in their difficult work.

FULL BLACK
FULL BLACK

That’s still the beauty of America – Free Speech. Red means you made the libs mad, but your words are still there. What a country!

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