Topic: Bank Bail Ins

European Union finance ministers are finalizing an agreement for a common rescue fund to handle future bank collapses. The plan involves "Cyprus-style" bail-ins, where depositors' money is seized first, followed by national taxpayer funds, and finally the European Stability Mechanism (ESM). The hosts predict this system will be fully operational by 2016 to manage an anticipated financial crisis.

The European Union's new "bail-in" law is discussed, which allows banks to seize depositor funds during a collapse. The hosts argue that the 2013 Cyprus banking crisis was a test case for this policy and warn of a potential domino effect in the European banking sector.

The European Union is shifting from "bail-outs" to "bail-ins," where depositors and investors are forced to cover the losses of failing banks. This policy could allow the government to seize interbank deposits, meaning money from a stable bank in one country could be used to save a failing bank in another. The hosts warn that this represents a significant threat to private savings across the Eurozone.

The 2013 Canadian budget includes language regarding the "rapid conversion of bank liabilities," which the hosts identify as a "bail-in" policy similar to the one implemented in Cyprus. Investor Jim Rogers is cited regarding the danger of trusting government assurances about bank safety. The hosts warn that European banks, specifically Santander, are changing terms to allow for the seizure of depositor funds.