Wednesday, 27 March 2013

Open Bank Resolution Plan SCAM

Despite whats being spun in the mainstream media everywhere you turn in regard to the Open Bank Resolution Plan, that the Cyprus banking crisis has finally shone a light on, such as was in New Zealand's Dominion Post newspaper (link below);
The main beneficiaries of the policy will not be the bank's owners, who will have lost their shirts by the time the policy is invoked, but taxpayers. The policy reduces the risk of a government having to bail out a failed bank simply to keep the economy ticking over."

- the spin being that in the case of the Open Bank Resolution Plan being implemented, no depositors funds would be touched until all bond holders and owning shareholders had first 'lost their shirts'.

Please read and listen to below to learn the sad truth about a very special group of senior secured creditors of the international banking network that have some very special privileges;

Secured and preferred creditors
"Secured creditors include those with a legal priority over the bank’s assets. The OBR process should have no impact on the ranking of creditors. Secured creditors would look to their security in the first instance to meet their claims on the bank."
Please read this below that makes it clearer from the International Financial Stability Board (FSB) established to coordinate at the international level the work of national financial authorities and international standard setting bodies and to develop and promote the implementation of effective regulatory, supervisory and other financial sector policies. It brings together national authorities responsible for financial stability in significant international financial centres, international financial institutions, sector-specific international groupings of regulators and supervisors, and committees of central bank experts;
respect the hierarchy of claims that would apply in a liquidation, and ensure that no creditors are worse off than they would be in liquidation, so as to preserve creditors’ legal rights.....
allocate losses on firm owners (shareholders) and unsecured and uninsured creditors in their order of seniority”

If you listen to the Radio New Zealand audio Thursday 21 March 2013 in which Kathryn Ryan interviews economic commentator Gareth Vaughan re the Open Bank Resolution Plan (well worth a listen!), he quite clearly states that depositors money would only be touched after all bond holders and shareholders have 'lost their shirts', but in the below article he wrote he makes it clear he understands otherwise, whats up with that?
Thursday 21 March 2013
4.15min Kathryn Ryan, “is there any comparison to be made with what the Cyprus government is trying to do, unsuccessfully at the moment, which is to trim savers bank accounts, take a levy of up to 10% out of their bank accounts as part of an economic bailout deal with the EU, is their any comparison between that and the measures the Reserve Bank is looking at in the case of a bank failure?

Gareth Vaughan, “yeah, look I mean, I think, I think it is an interesting comparison but there are differences, um, what they’re looking at in Cyprus it also includes giving the bank depositors shares in the bank so that in theory if the bank share price were to recovers then the depositor could share in the upside of that recovery, um, there is nothing like that proposed in the Open Bank Resolution Policy here.
Basically what would happen is if one of the banks is in serious trouble and the Reserve Bank and the Government decided to implement the Open Bank Resolution policy then it would freeze all the banks liabilities, um, overnight, um, and it would, you know, potentially take what they call a 'hair cut', a percentage off all of those which includes bonds and deposits, and remembering at that point that shareholders would have been wiped out.”

Kathryn Ryan, “What do you mean by shareholders would have been wiped out, who are you referring to”?

Gareth Vaughan, “If we are talking about hair cuts on bonds and deposits then shareholders are gone already. I mean their money would have been lost by that point already.”

Gareth Vaughan mentioned during the above interview about a 'Covered Bond Bill' currently being moved through Parliament. This is a very interesting law that will see hard assets held offshore in custodial accounts so in the case of a New Zealand banking crisis the foreign Senior Secured Creditors in the case of a bank receivership get those hard assets before the lower class claimants in New Zealand;
The primary purpose of this Bill is to establish a legislative framework for covered bonds, the purpose of which is to ensure that New Zealand registered banks have access to the covered bond market as a source of long-term relatively stable finance.
A covered bond is a dual-recourse instrument under which bondholders both have an unsecured claim on the issuing bank and hold a secured interest over a specific pool of assets, called the cover pool.”
Gareth Vaughan
So what is OBR?
The Reserve Bank is moving to add the OBR policy to tools it could potentially use in the event of a bank failure.
The implementation of OBR would see all unsecured liabilities that rank equally among themselves, including deposits, having a portion frozen.”

There is another very, very concerning aspect of the above proposals and that is the monopolisation of New Zealands electronic payment, settlement and transfer system by foreign financial institutions. Since the wheels were put in motion for this plan there has been an omnibus of regulation and legislation taken place to align New Zealand to it.

We have for thirty odd years now been hooked into the Society for Worldwide Interbank Financial Telecommunication(SWIFT) a cooperative owned by all the banks of the world through which the financial world conducts its business operations with speed, certainty and confidence. More than 10,000 banking organisations, securities institutions and corporate customers in 212 countries trust us every day to exchange millions of standardised financial messages.

The SWIFT electronic payment and settlement system has been in place for thirty years and is currently our main transfer system. Its importance has recently been shown when it broke down;
'Thousands of Kiwis are waiting for their wages after a technical glitch brought down the system which manages payments between banks.
Steve Nichols, chief executive of Payments New Zealand, which oversees the interbank payment system, said the Swift payment system used by the banking industry had suffered an outage about 2am today.'

We are fortunate in New Zealand that thanks to Kiwi Bank and the Post Office computer system we are one of few nations that has back up electronic payment, settlement and transfer software should we ever choose to issue and distribute our own sovereign dollar money supply.

Various interests have of late been suggesting that Kiwi Bank be cut away from the Post Office;
Treasury hires Goldman Sachs to run ruler over KiwiBank

'Feb. 26 (BusinessDesk) – The Treasury hired Goldman Sachs to run the ruler over state-owned KiwiBank and its future capital needs.
A spokesman for the Treasury said the report has been completed but won’t be made public because the details are commercially sensitive.'

I would suggest that given the implications of the global scale Open Bank Resolution Plan and the nature of the institution giving the government secret advice on the future of Kiwi Bank that we should move heaven and earth to ensure that back up electronic payment, settlement and transfer software remain at the ready in this nation as it is as important life line to the nation as the New Zealand cargo shipping merchant navy was and would be a lethal blow if it went the same way! That being sold in a debt induced public asset auction to foreign financial free raiders.

For details of the extraordinary privileges of the senior secured bank bond holders and why wider society remains in the dark about them please read below;

In return for a set of obligations, such as making continuous bid and offer prices in marketable government securities or submitting reasonable bids in the auctions, these firms receive a set of privileges in the market. The nature and content of these obligations and privileges varies greatly from country to country. In some cases there are firms which play the role of primary dealers without formal official recognition but nevertheless with a degree of official encouragement.
Of course, setting up a primary dealer system should not be undertaken in isolation from the authorities establishing a market-oriented monetary policy, developing a well-functioning money market and following a reasonably steady and predictable issuing policy, without which no-one is likely to embark on dealing in government securities or to make a regular profit out of it. And for some countries in transition at least, it should be recognised that the normal development of a primary dealer system will be out of existing banks according to the "universal bank" model; primary dealers should not necessarily be thought of as stand-alone securities firms on the "anglo saxon" model.

By contrast, in Australia, Germany, Japan, Netherlands and New Zealand there are no formally designated primary dealers, although in these countries a group of firms do collaborate in the allocation and proper development of the market in an informal way.”

Secrecy By Securities Commission Exemptions at the Sovereign Debt Level
(below link now takes you to recently implemented Financial Markets Authority, just type “exemptions” into the search box on new site.)
Securities Act (Crown Wholesale Debt Securities) Exemption Notice 2004
Gazetted on 26 August 2004
Expires on 31 August 2009
(expires 31-8-2014)
Effects of the exemption
Investment statements for debt securities originally allotted by the Crown and onsold to the public will contain information about the Crown as the issuer of the securities, but will not be required to contain information about the wholesale investors offering the securities. 

Good luck out their my fellow citizens and businesses of the legitimate enterprise kind being eaten alive by the financial trickery sector.

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