Nonsense, if you read though the links and their sources and were following this scam from the Cyprus banking failure until now, and the bail-in laws that have come into being in other places since then you not be demonstrating such blind faith in the government. So I repeat for those who might be fooled: And remember, this guy was a Principal Researcher at APRA in 2004-10, during which time he was briefly acting Head of Research for a time, Dr Sy is one of the most qualified people to comment on APRA and the powers it will be given by this bill.
A former principal researcher at bank regulator APRA has revealed in a submission to a Senate inquiry that, contrary to government reassurances, Australian bank deposits are not guaranteed. This explosive revelation shreds the government’s repeated assurances that its new bill to give crisis resolution powers to the Australian Prudential Regulation Authority (APRA) will not allow the “bail-in” (confiscation) of bank deposits, because they are guaranteed up to $250,000 by the Financial Claims Scheme (FCS). In the cover letter to his submission to the Senate Economics Legislation Committee’s inquiry into the Financial Sector Legislation Amendment (Crisis Resolution Powers and Other Measures) Bill 2017, Dr Wilson Sy asks Committee chair Senator Jane Hume: “As a matter of urgency, I need to ask: are you prepared to have your savings in bank deposits confiscated to save insolvent banks? What about the millions of voters you represent? How would they react if you allow this to happen to them?” Dr Sy charges that the bill “gives the Government and APRA new discretionary powers to confiscate bank deposits”, and that it should be rejected. (Dr Sy’s submission, “Protect Deposits Not the Fraudulent System”, is the first submission posted on the Senate inquiry’s website, and can be accessed here.) As a Principal Researcher at APRA in 2004-10, during which time he was briefly acting Head of Research for a time, Dr Sy is one of the most qualified people to comment on APRA and the powers it will be given by this bill. Both the 2008 global financial crisis and introduction of the Financial Claims Scheme occurred while he was at APRA. FCS guarantee not activated The essential point that Dr Sy makes is that the FCS is not an absolute guarantee. He quotes the FCS website, which makes clear that the FCS will only take effect ifthe government activates it when an ADI (Authorised Deposit-taking Institution—a bank, credit union, building society etc.) fails. “That is, when a bank fails, i.e. becomes insolvent, the Australian Government or APRA then has the discretion to decide whether or not to activate the FCS”, he says. “Hence, it should be emphasised that: “Bank deposits are not protected or guaranteed at all.” Under the Banking Act 1959, Dr Sy explains, APRA is responsible for two potentially conflicting objectives: the protection of depositors AND the promotion of financial stability. This depositor protection is “illusory”, he asserts, because the Banking Act doesn’t state which objective has priority. Under the new bill, however, APRA will have the discretionary power to decide which objective has priority; alarmingly, it will be able to make such a decision “in secrecy”. Dr Sy references Subdivision D, Section 11CH (p.24) of the bill, which states that APRA may decide that its orders must be kept secret if it is “necessary to protect the depositors of any ADI OR to promote financial system stability”. (Emphasis added by Sy.) The replacement of “AND” with “OR” confirms that the objectives are in potential conflict. “Therefore”, Dr Sy continued, “it is important to recognise that the Bill allows APRA discretionary powers to decide secretly whether to protect depositors or to promote financial system stability.” Quoting a 2012 Reserve Bank of Australia paper, which stated that the priority of regulators, mandated under Commonwealth legislation, is to “pursue financial stability”, Dr Sy concludes: “Therefore, the evidence collected here strongly suggests that the Bill is designed to confiscate bank deposits to ‘bail in’ insolvent banks to save the financial system.”
