IMF Tells Australian Lawmakers To “Prevent Premature Disclosure Of Sensitive Information” On Bank Bail-Ins

17 Jul

IMF_technote_Nov2012

IMF: Financial Safety Net and Crisis Management Framework, November 2012, page 4 (click to enlarge)

IMF: Financial Safety Net and Crisis Management Framework, November 2012, page 4 (click to enlarge)

IMF: Financial Safety Net and Crisis Management Framework, November 2012, page 5 (click to enlarge)

IMF: Financial Safety Net and Crisis Management Framework, November 2012, page 5 (click to enlarge)

 

Orwell would be impressed with this.

In a November 2012 Technical Note on the Financial Sector Program Update for Australia, as part of their Financial Safety Net and Crisis Management Framework, the IMF has advised that there is a problem (my bold emphasis added):

Past simulation exercises revealed the need for legislative changes to prevent premature disclosure of sensitive information. Australia’s securities disclosure regime requires, for the protection of investors, immediate and continuous disclosure of information that could reasonably be expected to have a material effect on the price or value of an ADI’s securities. There is a high probability that any resolution or crisis response measures will impact the price or value of an authorized deposit-taking institution’s (ADI’s) securities.

Poor coordination of compliance with the disclosure requirements, timing of resolution or crisis response actions, and the overall public communication strategy regarding these actions could pose risks to financial stability (e.g., through depositor runs) or thwart resolution actions (e.g., through the stripping of the ADI’s assets by insiders) or cause market disruptions. Legislative changes that reduce tension between investor protection and financial stability should be pursued.

“Reduce tension” between investor protection and financial stability?!

By making laws to “prevent premature disclosure of sensitive information”?!?!

In order to prevent bank runs, which would happen if investors were to find out that a Cyprus-style “resolution or crisis response measure” is in the offing for the bank that they have their money in?!?!!!!

Truly, moral relativism is one of The greatest evils of our time.

These people have no Conscience.

None.

UPDATE:

The Treasury department put this problem to the banks in their September 2012 Consultation Paper, with a proposal to suspend the continuous disclosure requirements:

Australian Treasury, Strengthening APRA’s Crisis Management Powers, September 2012, page 26 (click to enlarge)

Australian Treasury, Strengthening APRA’s Crisis Management Powers, September 2012, page 26 (click to enlarge)

Australian Treasury, Strengthening APRA's Crisis Management Powers, September 2012, page 29 (click to enlarge)

Australian Treasury, Strengthening APRA’s Crisis Management Powers, September 2012, page 29 (click to enlarge)

… and unsurprisingly, the banks have agreed to it:

AFMA, letter to Australian Treasury, January 2013, pp 7-8 (click to enlarge)

AFMA, letter to Australian Treasury, January 2013, pp 7-8 (click to enlarge)

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21 Responses to “IMF Tells Australian Lawmakers To “Prevent Premature Disclosure Of Sensitive Information” On Bank Bail-Ins”

  1. mick July 17, 2013 at 1:22 pm #

    Whilst the memos do not make direct mention of anything other than “securities” I can see the implications. What I find interesting is the “which bank” (pun) comment at the end. So are there banks and then again other banks? Are all lenders carrying the same brand? And is it just a case of buyer beware?

    • The Blissful Ignoramus July 17, 2013 at 1:41 pm #

      …the memos do not make direct mention of anything other than “securities”

      Er … you best read them again.

      Or better yet, follow the links provided, and read the entire document/s.

      It could not be more clear.

      • mick July 17, 2013 at 3:34 pm #

        I did see the reference to “financial Stability” and “depositor runs” although it was not clear what these were referring to.

        Then there was mention of “investor protection and financial stability” which on the face of it is reassuring. But then we all know that mums and dads always end up holding the bag and getting burnt so who would have faith in such comforting words. Maybe those who hang on every work from helicopter Ben.

        I do see the writing on the wall given your previous posting from the RBA minutes and I have written to the “world’s greatest treasurer (ex)” for an explanation as well as Chris Bowen and Deborah O’Neill who quickly did the Labor thing and redirected the question so she did not have to deal with it. I await a response…………or should I say lies. It will be interesting.

        Perhaps you can explore the ways for readers to protect themselves in this coming scurge Blissful. Personally, I am beginning to make a few investments in gold and silver. It would be interesting to hear the view of the community though.

  2. Tomorrows Serf July 17, 2013 at 4:12 pm #

    Couldn’t agree more, Mick.

    Gold and Silver, outside the “bankstering” system, held in physical form, i.e.no “unallocated”, no “allocated”, no ETFs, no “certificates”, no “paper”, period.

    And if anyone has a better idea, I’d love to hear it.

    Looks like things are about to get weird for a while.

    • JMD July 18, 2013 at 12:09 am #

      No, that’s about a good an idea as it gets. There is good reason why it’s known as a precious metal.

      The fact remains though that on a global, or wholesale, scale unallocated gold trades on par with allocated & physical. It’s when this situation ends that the real crisis begins.

      • mick July 18, 2013 at 10:10 am #

        Unallocated gold not worth paper it is written on as banks and major dealers have onsold what they do not own. So if a crisis comes you would have little more than a piece of paper. Allocated safer…..but I have my reservations here too as central banks would not let you access your gold under emergency provisions like hyper inflation. Your government would give you (paper) cash and take your gold. Best thing is physical gold. There is already legislation in Australia and the US giving governments the right to take even this but then they would have to find it first.

        • JMD July 18, 2013 at 10:35 am #

          So you say, but that’s not the current reality whether you like it or not.

          • mick July 18, 2013 at 10:47 am #

            You are correct about the current state of play. I should have made it clearer that problems in this market will only happen if the game of musical chairs hots up. I understand that the big gold dealers have paper traded much more gold than they actually have in their vaults. So if and when trucks roll up to take (physical) delivery the game will come to a head. The likes of Goldman Sachs simply would not be able to deliver.

            Given the manipulation of the silver market by Goldman Sachs and the ‘arrangement’ with governments you have to eventually realise that the big boys don’t care. Blissful has made this very clear with some of the information in his posts. When you own the game you make your own rules. And when the rules go against you you change the rules……………heads I win, tales I do not lose.

            Those who trade paper gold may be ok for the time being. But then the system, whilst broken, is still functioning and the game is still in play. Give it time JMD.

            • JMD July 18, 2013 at 1:34 pm #

              I regard it more as ignorance & general stupidity rather than ‘bankster’ manipulation.

              A Ponzi scheme, everyone thinks it’s great until one day it isn’t. In the present case the Ponzi scheme is so colossal that few are aware that it’s not actually just the natural order of things.

              Being so precious, money leads to all sorts of irrational human behaviour. In any case the root of the problem is the insolvency of government not conniving ‘banksters’.

            • mick July 18, 2013 at 5:22 pm #

              The reality about populations is that most are so stupid that ordinary people will not listen even when told as this is why they vote in governments. Nothing is going to change that.

              You are right about the state of the world being a Ponzi scheme. The trick is to beat the well healed to the chairs when the music stops in this game of musical chairs. I venture to say that even knowing what is going on in the world economy will still see some of us wait too long and get caught out. Blissful’s blog on bail-ins tells me that the big end of town may be getting ready. Buyer beware!!

              Whilst you have described governments as the culprits remember that governments do not act alone. Their partners in crime include banks and bullion houses. These are really casinos because they lay their bets and HOPE that it all works out according to their master plan. Whilst the ability to manipulate markets is a permitted use for these organisations there are times in history when it all goes horribly wrong and they lose control. At that time these entities are bailed out by their government criminals from what I can see. Tell me if I am wrong.

            • JMD July 18, 2013 at 8:56 pm #

              The government is where the rot stems from, the root of the problem. No private banker can force you to except his dodgy credit, only the government banker can do that. That would be the Reserve Bank.

              If the ‘banksters’ are getting away with murder it is because the government is happy with the banking system monetising its own bad debt – government bonds. Realise all ‘bankster’ credit is denominated in $, the obligation of the government bank, so who’s the ‘Don’? The government is long insolvent yet its credit trades ‘money good’, literally as money. Irrational yet reality.

            • JMD July 18, 2013 at 8:57 pm #

              accept his dodgy credit

  3. Kevin Moore July 17, 2013 at 4:15 pm #

    From “ON TARGET” 25 Jan. 2013
    .
    http://www.alor.org/index.html#1a

    HEADLINES SPELL IT OUT: BUT MEDIA NEVER QUESTIONS AS TO CAUSE
    by Betty Luks
    .
    The clear message is in the headlines. This debt-laden nation and its debt-laden people are to be bankrupted and sold off by the Usurers’ agents – the banks. The banks in turn operate according to laws drafted by politicians that favour them – as is the case all round the world.
    .
    Examples of this Usury-ridden, debt-laden land
    • “Rural debt rises across agri-sectors” and; “NQ shock as receiver moves in” Queensland Country Life, 1 December 2011;
    • “Shires to sell assets” – Weekly Times, 9 January, 2013.
    • “294 Fewer Farmers Every Month” The River News, Waikerie 19 December 2012
    • ‘Cow of a Time as Debt Weights Down Cattlemen” and “Local Food Industry Needs China Funds to Feed World” Stock Journal 10 January 2013.
    .
    Tell me fellow Australian, have you not had enough yet? Are you going to just give in without a whimper? Or are you going to insist your local state and federal politician take up the matters that are of concern to you and your fellow Australian AND DEAL WITH THEM?
    .
    I repeat a portion of G.K. Chesterton’s quote taken from “Utopia of Usurers”
    “Every religion, apart from open devil worship, must appeal to a virtue or the pretence of a virtue. But a virtue, generally speaking, does some good to everybody. It is therefore necessary to distinguish among the people it was meant to benefit, those whom it does benefit. Modern broad-mindedness benefits the rich; and benefits nobody else. It was meant to benefit the rich; and meant to benefit nobody else….”
    .
    Chesterton was of course referring to the Church’s traditional teaching on the true purpose of a money system and the evils of Usury. Historically Religion/Capitalism brought about great changes in the people’s thinking and understanding on this fundamental matter. Download from League’s website – “The Enemy Within the Empire” by Eric D. Butler
    .
    The Heritage Bookshop Services and Veritas online carry the following
    “Utopia of Usurers” by G.K. Chesterton, $16.00 + postage : “The Just Tax” by Geoffrey Dobbs. $4.00 + postage.
    .
    And “O’Malley MHR” by Larry Noye. In a brisk conversational style Larry Noye describes the experiences of King O’Malley on his arrival in Australia around 1888. He immediately made an impression with his colourful oratory. He served three years in the South Australian Parliament, and 16 years in the fledgling Federal Parliament.
    As Minister for Home Affairs he promoted the trans-continental railway and saw to it that it was constructed without incurring a debt burden requiring years of payments. The selection of the site of the ACT was another of his responsibilities. Having been trained in banking in America, O’Malley campaigned tirelessly for a “people’s bank” in Australia. This eventually came about in 1911. O’Malley lived until 1953 – commenting on social and political issues up to his death. This book gives an insight into Australian history and life over an eventful 65 years. Price: $35.00 + postage.
    .

    “The Story of the Commonwealth Bank” by D.J. Amos:
    Leading politicians still scoff at the idea that low-interest creation of money is not only possible, but is part of the answer to Australia’s present woes. It is important to re-learn how Australia made enormous progress when ‘the peoples’ bank’ (the original Commonwealth Bank) controlled the creation of Australia’s credit.
    The original Commonwealth Bank was able to fund the cost of the First World War without debt to the nation and re-settle returned soldiers on land grants at extremely low rates of interest. Public works, such as the East-West Railway, were funded free of debt. The insignificant 0.625% interest charged was sufficient for the bank to make a profit! This book is immensely important for Australians to help with their understanding of the money system. (It will be an introduction to the study of C.H. Douglas’ answer to the usurious international debt-finance.) The hard copy is available – $5.00 + postage. Or download: “The Story of the Commonwealth Bank”
    .

    There is ample material on the League’s website – plus a good selection of educational material available from our Book Services. Start with “The Story of the Commonwealth Bank” and digest the fact that politicians of all persuasions have betrayed their own people for many a year.
    .

    Tell me gentle reader, do you grasp the truth that money is merely a means to an end and NOT an end in itself? Do you really think blips on a computer (bank’s ‘money’ transactions) are of more value than the families of this nation and the real wealth of this land?

    • The Blissful Ignoramus July 17, 2013 at 4:42 pm #

      Thanks for this Kevin. Looks interesting and will definitely follow up when have time — bit busy scouring all these government docs that are source for the posts this week.

      EDIT: Actually, it looks brilliant! Bookmarked and prioritised … thank you again.

    • mick July 17, 2013 at 4:50 pm #

      Kevin: I see your passion but sadly the Australian public is apathetic and doesn’t give a hoot until it is too late. It has been so for all of my long life and I cannot see this changing.

      Having campaigned for the past 7 years to force the state government into introducing controls to prevent corrupt local councils from permitting their mates in the real estate industry from renting out residential homes for functions (bucks, hens, parties, gaming, schoolies and the like) I find myself no further down the track. What I have encountered is the routine fob off and passing of correspondence to another department, the refusal to answer questions or address issues of illegality and the trivialisation of requests so that the response becomes a trivial and non relevant one. There is mass corruption in both the state and local government sectors and the public service appears to run its own agenda.

      I have recounted the above Kevin because during my many deliberations I have failed to get public support despite the issue affecting many thousands of home owners along the NSW coastal strip. It is always either “I do not have and issue” or “I’ll deal with it if it happens to me”. The reality is that ‘I’m alright Jack’ is probably closer to the truth and Australians are so busy having fun and doing their own thing that they do not give a tinkers.

      So you think that you can get off their fat behinds. Good luck mate!! If you succeed then please give me the formula. Like my issue I assure you that they will come knocking when they are suffering, when the horse has bolted and when it is too late.

  4. Kevin Moore July 17, 2013 at 6:40 pm #

    Mick,
    .
    When the Bookkeeper makes up His account of my life, I hope the ledger shows that i’m in the black.
    .
    I’m no wordsmith but I can understand and pass the message along.
    .
    “The fear of the lord is the beginning of wisdom” Proverbs 1:7 –
    .
    This is my motivation –
    .
    Ezekiel 33
    .
    New King James Version (NKJV)
    .
    The Watchman and His Message
    .
    33 Again the word of the Lord came to me, saying, 2 “Son of man, speak to the children of your people, and say to them: ‘When I bring the sword upon a land, and the people of the land take a man from their territory and make him their watchman,
    .
    3 when he sees the sword coming upon the land, if he blows the trumpet and warns the people, 4 then whoever hears the sound of the trumpet and does not take warning, if the sword comes and takes him away, his blood shall be on his own head.
    .
    5 He heard the sound of the trumpet, but did not take warning; his blood shall be upon himself. But he who takes warning will save his life. 6 But if the watchman sees the sword coming and does not blow the trumpet, and the people are not warned, and the sword comes and takes any person from among them, he is taken away in his iniquity; but his blood I will require at the watchman’s hand.’

    • mick July 17, 2013 at 9:01 pm #

      Kev: When that day comes I hope that I can say that I did my best to wage the war against corruption in all its forms and that I tried to change that which I alone am unable to change alone.

      You sound like a good man. There should be more of you.

  5. Sum Hung Gui July 18, 2013 at 2:05 am #

    So,,,,,what if a crisis did hit the major banks, but not say smaller institutions like Credit Unions (Although I can see that their own Credit Line to/from the major Banks will be affected) does all this legislative change mean that they will loot the savings of those in these small institutions?

    • The Blissful Ignoramus July 18, 2013 at 8:42 am #

      If they fall under APRA’s purview (which I understand they do), then in theory credit unions too could be impacted. On the theory (I don’t know if its true) that they do not engage in fractional reserve lending, then one might hope they are not leveraged. Or not much. Or not enough to go down with the system. Personally, I’m dubious.

      • mick July 18, 2013 at 10:15 am #

        The question I have is will all financial institutions be in the same (leaky) boat? The big 4 all operate on the same knife edge. But smaller players I would have though might be safer. For example Members Equity uses superannuation funds to lend or at least that is my perception. So will institutions like these be safe long after the big 4 have raped their depositors? Who knows. Like all of us I’ll be monitoring proceedings carefully if our property market takes a hit as this is more than likely going to be the start of the game.

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