Cyprus has backed down from confiscating everyone’s bank accounts, to confiscating only those with over 100,000 Euros in their accounts. Immediately other bank leaders in Europe began suggesting the same theft for other nations. As far as I’m concerned, the international banking community is truly a global culture and there is no reason at all to hope that our money masters here in the United States think any differently than those who imposed their will on Cyprus.
But in case you disagreed with me, we now have definite proof that the moral contagion has jumped the Atlantic. The researchers at the Silver Doctor’s blog, managed to read the epically long and boring (433 pages!) Canada Economic Action Plan for 2013 (pdf) and discover that, legally speaking, Cyprus now sits north of our border. Mish quotes the passage:
“The Government proposes to implement a bail-in regime for systemically important banks. This regime will be designed to ensure that, in the unlikely event that a systemically important bank depletes its capital, the bank can be recapitalized and returned to viability through the very rapid conversion of certain bank liabilities into regulatory capital. This will reduce risks for taxpayers. The Government will consult stakeholders on how best to implement a bail- in regime in Canada. Implementation timelines will allow for a smooth transition for affected institutions, investors and other market participants.”
So there are normal banks that just go bankrupt but there are “systematically important banks” that will receive different treatment. They get the “very rapid conversion of certain bank liabilities into regulatory capital.” What that means is that they get to confiscate the deposits bank customers have left with the bank and use them as their own assets. I’m not sure how this will “reduce risks for taxpayers.” I suspect taxpayers as bank customers will feel like they have been just as violated by the state’s protection of “too big to fail.”
I think this concept of “systematically important” is really… well… important. But why only apply it to banks? Obviously it also applies to people as well, right? Think about how important Steve Jobs was to Apple and then how important Apple is to the United States economy. What if someone like that needed a major organ transplant? Should they have to wait in a line with all other Americans waiting for a donor? It makes no sense to give life-saving treatment to people of no systematic importance while increasing the risk for others who are far more systematically important.
And besides, what if the best organ matches that have the best chance of being compatible with a person are owned by healthy people who don’t intend to die any time soon? It seems to me this principle of systematic importance should provide that rationale for different practices in society. Shouldn’t they be able to choose the healthiest people out there with the best match in organs so that they can “convert liabilities into assets” by just taking them? We can’t have “systematically important” people like Jamey Dimon or Michael Bloomberg die on us, can we? Of course, the peons will complain (especially the organ-ripped and those who know them personally), but we’ll just explain that we’re doing it to “save Main street,” that the CEOs, bankers, and politicians are “doing God’s work,” and that they should thank these people for taking our internal organs so that they can continue to sustain our economy.
Maybe we could do the operations on top of a giant pyramid on live TV so we can all also get together and reaffirm the essential moral basis of community.