Daily Archives: 2 April 2013

Are Bank Depositors’ Funds at Risk?

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…from yet more government confiscation schemes?  It seems that Euro Group President Jeroen Dijsselbloem’s remark that raiding Cypriot depositors’ deposit accounts to bail out failed banks in that country ought to be the model for the rest of the eurozone wasn’t so far off the mark after all, the publicly pronounced opprobrium notwithstanding.  This condemnation, for instance, came from Luxembourg Prime Minister Jean-Claude Juncker:

It disturbs me when the way in which they tried to resolve the Cyprus problem is held up as a blueprint for future rescue plans.  It’s no blueprint.  We should not give the impression that future savings deposits in Europe might not be secure.  We should not give the impression that investors should not keep their money in Europe.  This harms Europe’s entire financial center.

Yet this seems to be the plan, according to Spiegel Online International reporting.

[I]n the European Parliament, politicians are considering ways to make banks bear greater responsibility for their own financial problems.  …  The discussion includes the possibility of future compulsory levies on major depositors[.]

…

Under the proposal, deposits of up to €100,000 would be excluded from any loss participation at a bank.  Any deposits over that amount would only get hit if the losses couldn’t be fully covered through a bank’s shareholders and other creditors.

Why would anyone deposit their money with banks in a political regime in which those deposits are at such risk of confiscation whenever a government finds it…useful?  Wouldn’t such placement be a violation of the fiduciary responsibility of the depositor toward his own investors and creditors?

The Arrogance of Government

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Here is an example of why we have a Constitution that explicitly limits the power of the Federal government and within that Constitution a Bill of Rights that both explains those limits and explicitly reserves the infinity of remaining rights and powers to the people and to the states.

This example, though, is by one of those state governments, the government of Maryland which also says it’s legal for approved gangs to commit trespass and terrorize children inside their own homes.  State Senate President Thomas V. Mike Miller (D, Dist 27) said this in all seriousness:

We’ve allowed them to manufacture.  We’ve allowed them to sell, and we’ve cut back on their paperwork.

Notice that: government has allowed.  Because government will make these decisions, because what a manufacturer—or anyone—can do is only what a government will permit.

Never mind that the Maryland Constitution says this in Article I of its Declaration of Rights:

That all Government of right originates from the People, is founded in compact only, and instituted solely for the good of the whole….

In other words, government works for the people, and what government can do is what the people will permit, not the other way around.

Oh, wait, this is just Progressives disregarding yet another Constitution that’s more than 100 years old, confusing, and not binding on anything.