The European Commission announced last Thursday it was going to sue before the European Court of Justice six European countries that have still not integrated into their national rights the Bank Recovery and Resolution Directive (BRDD). This directive allows a bank going bankrupt to solicit its shareholders first (which makes sense), then the holders of bonds issued by the bank (also makes sense), and if this isn’t enough – here comes the crunch – its clients’ accounts, which amounts to legal robbery, the calling into question of the right of ownership, and a real scandal. Normally only accounts above 100,000 euro may be used for a bailout, but this guarantee is an illusion, and all savers will be touched, of course, as we’ve explained recently.
The six countries are the Czech Republic, Luxemburg, the Netherlands, Poland, Romania and Sweden. Hey, France is not on the list! It is because this integration has already happened, but not before the National Assembly and the Senate, which would have been good publicity for the saver/citizen, but not so much for the banking lobby and the government. No, this happened discreetly through a decree in the middle of the summer vacations, on August 20.
Everyone must now be made aware that if a bank goes bankrupt, it will have the legal right to bail itself out by taking money out of your account, whether it’s in France or, very soon, in all European countries.
One may wonder why the European Commission is so quick on the button in pushing for the adoption of this directive and going after the late compliers, as “it is extremely important that these rules be in place in all member countries,” it said in a statement. There are not too many trials going on at the European Court of Justice and several other directives are still not implemented in such and such country... Could it be that some well-informed people in Brussels are worried about the next financial and banking crisis?
The saver must, by all means, inquire about the financial solidity of his/her bank, even though this information is difficult to obtain, and more fundamentally, reflect upon the justification for putting all of one’s money in bank accounts. Now, more than ever, doing so is risky. There are alternatives, and the best of them is physical gold stored outside the banking system, as GoldBroker followers know very well. In any case, when the next banking crisis hits, the savers will be on the first line and they will lose a lot of money... and all of this will be legal.