That FDIC paper is not referring to depositors as unsecured creditors. If fact the paper is at pains to say that by protecting depositors the bank is less likely to be a victim of bank runs.
Are depositors not unsecured creditors under most current banking rules ?
No. A deposit holder is secured by a floating charge over most/all the assets of a bank.
No. A deposit holder is secured by a floating charge over most/all the assets of a bank.
I would have thought, that in the wind up of a bank, deposit holders would stand behind bank creditors and divvy up the proceeds after creditors have been paid out.
Do you have a link that discloses exactly where deposit holders stand in relation to security?
Failure resolution
A final layer of safety in the Australian financial system is
the various protections offered when an institution fails.
Depositor preference
In the case of authorised deposit-taking institutions
(ADIs) ”” banks, building societies and credit unions
”” protection is firstly provided for depositors under
what is termed ‘depositor preference’. ‘Depositor
preference’ is enshrined in the Banking Act 1959 and
requires that depositors in Australia are first in line
to recover their funds from the assets of a failed ADI
(after amounts paid under the Financial Claims Scheme
have first been met from the assets of the failed ADI).
http://www.apra.gov.au/AboutAPRA/Publications/Documents/APRA_FS1_122011_v1.pdf
If you have a look at an Australian bank balance sheet, they have a lot of fat on them that I wouldn't be worried about it.
As Cyprus cautiously cracked open the doors of its crisis-ridden banks on Thursday, pig farmer Stelios Sofroniou fumed at being able to withdraw only €300 ($369). That would buy just 1 tonne of feed, not the 30 tonnes he needed for his 15,000 pigs.
...
For Sofroniou, the bailout terms show that the European Union is driven by the same merciless forces now playing out in sheds of his family farm.
''The weakest pigs in the pen don't eat,'' he said. ''The strong ones eat everything. This is the law of nature.'' In a daily struggle for meagre rations, he said, ''the weak ones will be eaten''.
+1. Just putting up a link with no explanation is pretty irritating.ASICK,
Rather than just flooding the threads with links you might generate more discussion if you let us know hwat each article is about, why/how it is different to the rest of the articles, or your opinions on it
Thanks
ASICK,
Rather than just flooding the threads with links you might generate more discussion if you let us know hwat each article is about, why/how it is different to the rest of the articles, or your opinions on it
Thanks
+1. Just putting up a link with no explanation is pretty irritating.
HUNDREDS of Russians have deposited millions of dollars in cash in the Mediterranean island of Cyprus in what local bankers suspect has been a giant scheme to launder the profits of covert Middle East arms sales and the proceeds of Moscow's mafia.
Foreign and local banking officials have told the Independent that over the past two years Russians have arrived at their offices in Limassol and Nicosia with suitcases containing up to dollars 15m ( pounds 10m) in one-hundred-dollar bills, opened accounts and then transferred funds to Switzerland, Germany and Britain.
Although the Cyprus Central Bank insists that strict financial controls by the Greek Cypriot administration prevent any 'bad' money coming into the island, local bankers say that Russians have deposited millions - sometimes carrying the money to the banks in taxis direct from Larnaca airport - with only nominal inquiries from banks about the sources of the money. 'Let's speak frankly,' one Cypriot banker said in Nicosia. 'Russia is bankrupt and can't generate this kind of cash. All money that's coming from Moscow is illegal because of Russia's exchange-control regulations. But we're talking of millions and that can only come from illegal arms sales, most probably to Iran and Iraq.'
I thought the articles were self-explanatory and informative - there was simply nothing I could add, but I'm pleased to desist if you guys aren't interested in great information.
I thought the articles were self-explanatory and informative - there was simply nothing I could add, but I'm pleased to desist if you guys aren't interested in great information.
I thought the articles were self-explanatory and informative - there was simply nothing I could add, but I'm pleased to desist if you guys aren't interested in great information.
Don't mind the feedback ASICK, if people don't want to have to click to find out what a link is about they can just not click it.
Link description would be preferable but it's hardly the end of the world.
Hey mate, I enjoy your links, but perhaps you could quote an extract to give us a taste of it?
However if you don't wish to do that, I hope you keep contributing
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