Canada’s six largest banks designated “too big to fail”
Regulator calls six banks systemically important, will face stricter rules on capital Canada’s Big Six banks face stricter rules on capital
Madhavi Acharya-Tom Yew, Toronto Star | March 26, 2013
Canada’s six largest banks will be subject to more stringent requirements and supervision after being designated too big to fail by the federal regulator. …
The “systemically important” designation stems from the Basel committee on banking oversight, a global group that has been developing measures to prevent a repeat of the 2008 financial crisis. …
In November, the Financial Stability Board updated its list of 28 international financial institutions that were assessed too big to fail. None of the Canadian banks made the grade.
However, OSFI [Office of the Superintendent of Financial Institutions] said the banks are systemically important to the Canadian economy …
It looks to me like this focus on regulation is to sugar-coat putting banks in an even more privileged position so that tax-payers are on the hook when they collapse.
If banks don’t have enough cash to pay depositors when they’re in trouble, then they’re inherently fraudulent and illegitimate institutions. That’s the whole point about fractional reserve banking.
The “regulation” is that they need to have – by 2016(!) – a common equity ratio of 8% instead of 7%.
Is that how regular people live either way? We can’t just make up money out of thin air and lend it out.
More and more, governments, private banks and monopolist corporations are becoming the same thing. Mega-corporations love privileges and love “regulations” that give them a special advantage and leave others, including tax-payers, disadvantaged.
All of this is hostile to free enterprise competition. Bailouts and “too big to fail” is business-as-usual corporatist corruption. Instead of society being guided by principles like free enterprise, property rights and justice, we have arbitrary power, fraud, theft and propaganda.
Another version: http://www.cbc.ca/news/canada/story/2013/03/26/osfi-banks-capital.html
The interpretation I gave in the above post about tax-payers being on the hook could be wrong.
Another quote from above Toronto Star article hints that taxpayers might not be the direct target:
Also see the section in the federal budget talking about “bail-ins” and a bank’s liabilities.
In light of what has happened with Cyprus bank depositors, what could that mean?
Appears to be provision for Cyprus style “bail-ins” in the Canadian federal budget
Another writer interprets Canadian federal budget “bail-in” as allowing for Cyprus-style confiscation of bank deposits