The rules, known as the bank recovery and resolution directive (BRRD), seek to shield taxpayers from having to bail out troubled lenders, forcing creditors and shareholders to contribute to the rescue in a process known as “bail-in”.
I thought I read about a ‘ruling’ here in the U.S. that said that depositors here were to be considered ‘shareholders’ in the instance of a bank failure. The consensus as I recall was that saving and checking account holders could and probably would lose major portions of their deposits as the Bank tried to stay solvent in such an occurrence
Depositors are not shareholders, but instead are creditors. When you put your money in the bank you are lending it money which it uses to make loans or invest in securiies, etc. If they make too many bad loans, you don’t get all of your money back. That is why the FDIC was established, to compensate smaller depositors. A bail in would affect those with large deposits who are among the banks largest creditors.
New Rules: Cyprus-style Bail-ins to Take Deposits and Pensions
http://www.huffingtonpost.com/ellen-brown/new-g20-bailin-rules-now-_b_6244394.html
On the weekend of November 16th, the G20 leaders whisked into Brisbane, posed for their photo ops, approved some proposals, made a show of roundly disapproving of Russian President Vladimir Putin, and whisked out again. It was all so fast, they may not have known what they were endorsing when they rubber-stamped the Financial Stability Board’s “Adequacy of Loss-Absorbing Capacity of Global Systemically Important Banks in Resolution,” which completely changes the rules of banking.
Russell Napier, writing in ZeroHedge, called it “the day money died.” In any case, it may have been the day deposits died as money. Unlike coins and paper bills, which cannot be written down or given a “haircut,” says Napier, deposits are now “just part of commercial banks’ capital structure.” That means they can be “bailed in” or confiscated to save the megabanks from derivative bets gone wrong.