The Global Bankers’ Coup: Bail-In and the Shadowy Financial Stability Board

fsb

On December 11, 2014, the US House passed a bill repealing the Dodd-Frank requirement that risky derivatives be pushed into big-bank subsidiaries, leaving our deposits and pensions exposed to massive derivatives losses. The bill was vigorously challenged by Senator Elizabeth Warren; but the tide turned when Jamie Dimon, CEO of JPMorganChase, stepped into the ring. Perhaps what prompted his intervention was the unanticipated $40 drop in the price of oil. As financial blogger Michael Snyder points out, that drop could trigger a derivatives payout that could bankrupt the biggest banks. And if the G20’s new “bail-in” rules are formalized, depositors and pensioners could be on the hook.

The new bail-in rules were discussed in my last post here. They are edicts of the Financial Stability Board (FSB), an unelected body of central bankers and finance ministers headquartered in the Bank for International Settlements in Basel, Switzerland. Where did the FSB get these sweeping powers, and is its mandate legally enforceable?

Those questions were addressed in an article I wrote in June 2009, two months after the FSB was formed, titled “Big Brother in Basel: BIS Financial Stability Board Undermines National Sovereignty.” It linked the strange boot shape of the BIS to a line from Orwell’s 1984: “a boot stamping on a human face—forever.” The concerns raised there seem to be materializing, so I’m republishing the bulk of that article here. We need to be paying attention, lest the bail-in juggernaut steamroll over us unchallenged.

The Shadowy Financial Stability Board

Alarm bells went off in April 2009, when the Bank for International Settlements (BIS) was linked to the new Financial Stability Board (FSB) signed onto by the G20 leaders in London. The FSB was an expansion of the older Financial Stability Forum (FSF) set up in 1999 to serve in a merely advisory capacity by the G7 (a group of finance ministers formed from the seven major industrialized nations). The chair of the FSF was the General Manager of the BIS. The new FSB was expanded to include all G20 members (19 nations plus the EU).

Formally called the “Group of Twenty Finance Ministers and Central Bank Governors,” the G20 was, like the G7, originally set up as a forum merely for cooperation and consultation on matters pertaining to the international financial system. What set off alarms was that the new Financial Stability Board had real teeth, imposing “obligations” and “commitments” on its members; and this feat was pulled off without legislative formalities, skirting the usual exacting requirements for treaties. It was all done in hasty response to an “emergency.” Problem-reaction-solution was the slippery slope of coups.

Buried on page 83 of an 89-page Report on Financial Regulatory Reform issued by the US Obama administration was a recommendation that the FSB strengthen and institutionalize its mandate to promote global financial stability. It sounded like a worthy goal, but there was a disturbing lack of detail. What was the FSB’s mandate, what were its expanded powers, and who was in charge? An article in The London Guardian addressed those issues in question and answer format:

Who runs the regulator? The Financial Stability Forum is chaired by Mario Draghi, governor of the Bank of Italy. The secretariat is based at the Bank for International Settlements’ headquarters in Basel, Switzerland.

Draghi was director general of the Italian treasury from 1991 to 2001, where he was responsible for widespread privatization (sell-off of government holdings to private investors). From 2002 to 2006, he was a partner at Goldman Sachs on Wall Street. He was succeeded in 2011 by Mark Carney, who also got his start at Goldman Sachs, working there for 13 years before going on to become Governor of the Bank of Canada in 2008 and Governor of the Bank of England in 2012. In 2011 and 2012, Carney attended the annual meetings of the controversial Bilderberg Group.

What will the new regulator do? The regulator will monitor potential risks to the economy . . . It will cooperate with the IMF, the Washington-based body that monitors countries’ financial health, lending funds if needed.

The IMF is an international banking organization that is also controversial. Joseph Stiglitz, former chief economist for the World Bank, charged it with ensnaring Third World countries in a debt trap from which they could not escape. Debtors unable to pay were bound by “conditionalities” that included a forced sell-off of national assets to private investors in order to service their loans.

What will the regulator oversee? All ‘systemically important’ financial institutions, instruments and markets.

The term “systemically important” was not defined. Would it include such systemically important institutions as national treasuries, and such systemically important markets as gold, oil and food?

How will it work? The body will establish a supervisory college to monitor each of the largest international financial services firms. . . . It will act as a clearing house for information-sharing and contingency planning for the benefit of its members. 

“Information-sharing” can mean illegal collusion. Would the information-sharing here include such things as secret agreements among central banks to buy or sell particular currencies, with the concomitant power to support or collapse targeted local economies?

What will the new regulator do about debt and loans? To prevent another debt bubble, the new body will recommend financial companies maintain provisions against credit losses and may impose constraints on borrowing.

What sort of constraints? The Basel Accords, imposed by the Basel Committee on Banking Supervision (also housed at the BIS) had not necessarily worked out well. The first Basel Accord, issued in 1998, had been blamed for inducing a recession in Japan from which that country had yet to recover; and the Second Basel Accord and its associated mark-to-market rule had been blamed for bringing on the 2008 crisis. (For more on this, see The Public Bank Solution.)

The Amorphous 12 International Standards and Codes

Most troubling, perhaps, was this vague parenthetical reference in a press release issued by the BIS, titled “Financial Stability Forum Re-established as the Financial Stability Board”:

As obligations of membership, member countries and territories commit to . . . implement international financial standards (including the 12 key International Standards and Codes) . . . . 

This was not just friendly advice from an advisory board. It was a commitment to comply, so you would expect some detailed discussion concerning what those standards entailed. But a search of the major media revealed virtually nothing. The 12 key International Standards and Codes were left undefined and undiscussed. The FSB website listed them, but it was vague. The Standards and Codes covered broad areas that were apparently subject to modification as the overseeing committees saw fit. They included money and financial policy transparency, fiscal policy transparency, data dissemination, insolvency, corporate governance, accounting, auditing, payment and settlement, market integrity, banking supervision, securities regulation, and insurance supervision.

Take “fiscal policy transparency” as an example. The “Code of Good Practices on Fiscal Transparency” was adopted by the IMF Interim Committee in 1998. The “synoptic description” said:

The code contains transparency requirements to provide assurances to the public and to capital markets that a sufficiently complete picture of the structure and finances of government is available so as to allow the soundness of fiscal policy to be reliably assessed.

Members were required to provide a “picture of the structure and finances of government” that was complete enough for an assessment of its “soundness” — but an assessment by whom, and what if a government failed the test? Was an unelected private committee based in the BIS allowed to evaluate the “structure and function” of particular national governments and, if they were determined to have fiscal policies that were not “sound,” to impose “conditionalities” and “austerity measures” of the sort that the IMF was notorious for imposing on Third World countries? Suspicious observers wondered if that was how once-mighty nations were to be brought under the heel of Big Brother at last.

For three centuries, private international banking interests have brought governments in line by blocking them from issuing their own currencies and requiring them to borrow banker-issued “banknotes” instead. Political colonialism is now a thing of the past, but under the new FSB guidelines, nations could still be held in feudalistic subservience to foreign masters.

Consider this scenario: the new FSB rules precipitate a massive global depression due to contraction of the money supply. XYZ country wakes up to the fact that all of this is unnecessary – that it could be creating its own money, freeing itself from the debt trap, rather than borrowing from bankers who create money on computer screens and charge interest for the privilege of borrowing it. But this realization comes too late: the boot descends and XYZ is crushed into line. National sovereignty has been abdicated to a private committee, with no say by the voters.

Marilyn Barnewall, dubbed by Forbes Magazine the “dean of American private banking,” wrote in an April 2009 article titled “What Happened to American Sovereignty at G-20?”:

It seems the world’s bankers have executed a bloodless coup and now represent all of the people in the world. . . . President Obama agreed at the G20 meeting in London to create an international board with authority to intervene in U.S. corporations by dictating executive compensation and approving or disapproving business management decisions.  Under the new Financial Stability Board, the United States has only one vote. In other words, the group will be largely controlled by European central bankers. My guess is, they will represent themselves, not you and not me and certainly not America.

The Commitments Mandated by the Financial Stability Board Constitute a Commercial Treaty Requiring a Two-thirds Vote of the Senate

Are these commitments legally binding? Adoption of the FSB was never voted on by the public, either individually or through their legislators. The G20 Summit has been called “a New Bretton Woods,” referring to agreements entered into in 1944 establishing new rules for international trade. But Bretton Woods was put in place by Congressional Executive Agreement, requiring a majority vote of the legislature; and it more properly should have been done by treaty, requiring a two-thirds vote of the Senate, since it was an international agreement binding on the nation.

“Bail-in” is not the law yet, but the G20 governments will be called upon to adopt the FSB’s resolution measures when the proposal is finalized after taking comments in 2015. The authority of the G20 has been challenged, but mainly over whether important countries were left out of the mix. The omitted countries may prove to be the lucky ones, having avoided the FSB’s net.

____________________

Ellen Brown is an attorney, founder of the Public Banking Institute, and author of twelve books including the best-selling Web of Debt. Her latest book, The Public Bank Solution, explores successful public banking models historically and globally. Her 200+ blog articles are at EllenBrown.com.

35 Responses

  1. Better take your pensions in one shot…NOW !

    • Or just bend over.

    • I would recommend you transfer your retirement account into a CREDIT UNION…

      MONEY out of banks into CREDIT UNIONS….
      http://en.wikipedia.org/wiki/Credit_union
      In part;
      Tension has always existed between member-owned cooperative credit unions and for-profit banks in the United States. When credit unions were first organizing in the US in the early 20th century, the banking industry was opposed, remaining so ever since.
      The FDIC does not provide deposit insurance for credit unions, which are insured by the National Credit Union Administration (NCUA).
      https://en.wikipedia.org/wiki/National_Credit_Union_Administration
      The National Credit Union Administration (NCUA) is the independent federal agency created by the U.S. Congress to regulate, charter, and supervise federal credit unions
      http://en.wikipedia.org/wiki/Credit_union
      A credit union is a member-owned financial cooperative, democratically controlled by its members, and operated for the purpose of promoting thrift, providing credit at competitive rates, and providing other financial services to its members.[1][2][3]….
      Not-for-profit status
      In the credit union context, “not-for-profit” should not be confused with “non-profit” charities or similar organizations.[20] Credit unions are “not-for-profit” because they operate to serve their members rather than to maximize profits.[21][22][23]

  2. Reblogged this on Chuck's Amazing Site.

  3. Thank you Ellen for your exquisite ability to precisely tell us what is happening! I find I can always understand what is happening when I read your posts! I also appreciate your ability to give us historical perspective. Between your books and your blog, I have a good understanding of the truth of how money is created and who the real benefactors are.
    This information freaks me out, but I know why we need public banks and possibly sovereignty over creating our own money

    • Roxanne, though I’m not an expert of any sort, sovereign money is all we should have ! Debt-based money, ie., money that use rent to use for monetary transactions is for colonies and country’s not in control of their own monetary destinies ….as we have been a monetary colony since Hamilton undid Ben Franklin’s fine work with first colonial scrip and then the continental, which was ruined only by the Brits (of course) by counterfeiting…like the federal reserve does not and has for 100 years. Sovereign countries with such currency do not have much of a national debt as they don’t borrow the money they use. The government prints/generates it as needed and pays it’s bills that way if tax and tariffs, fees don’t cover expenses.. I must be done responsibly of course, which is why Bill Still etal. favor having the states use their 10th powers to control such printing, etc. to prevent over/under printing.

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  5. Dear Ellen,

    Thank you for your excellent article that only you can write for us.

    I have the impression that the Bank for International Settlements, and the Federal Reserve System are behind the U.N.’s push for eliminating national sovereignty by usurping the Environmental Protection Agency, and its array of regulatory commissions in the United States, and related, regulatory non-government organizations; components of Agenda 21. (1) I have the impression that-that initiative dovetails with the BIS and the IMF eliminating the final vestiges of monetized sovereignty of the U.S., and regulating the management of all private, corporate concerns in order to prevent them from expropriating all land, energy, food, fiber, and water, before the bank does. Do you think that is the situation? The bail in specter is wholesale robbery.

    Of course, we are witness to the mounting doom of global totalitarianism. I am hopeful that we the people will organize well enough to undercut that abomination.

    I appreciate your good work, which I prize as invaluable.

    You be well our dear friend.

    Always yours, Reed Kinney

    Notes:

    1. Jane Gaffin: https://janegaffin.wordpress.com/category/agenda-21/

    Agenda 21 Explained

    Agenda 21, by Lord Monckton

  6. […] by Ellen Brown, Web of Debt […]

  7. I live in Canada and my bother In-Law in California. He stated the following to me when I pointed this out to him:

    “Bail in protection in the USA can be achieved by most small private savers by keeping your money in Savings and Loans and even better – in Credit Union institutions…

    Period.

    Is he correct in his assumption ?

    • Dear Paul,

      MONEY out of banks into CREDIT UNIONS….
      I would also recommend transferring you retirement account into a CREDIT UNION…
      http://en.wikipedia.org/wiki/Credit_union
      In part;
      Tension has always existed between member-owned cooperative credit unions and for-profit banks in the United States. When credit unions were first organizing in the US in the early 20th century, the banking industry was opposed, remaining so ever since.
      The FDIC does not provide deposit insurance for credit unions, which are insured by the National Credit Union Administration (NCUA).
      https://en.wikipedia.org/wiki/National_Credit_Union_Administration
      The National Credit Union Administration (NCUA) is the independent federal agency created by the U.S. Congress to regulate, charter, and supervise federal credit unions
      http://en.wikipedia.org/wiki/Credit_union
      A credit union is a member-owned financial cooperative, democratically controlled by its members, and operated for the purpose of promoting thrift, providing credit at competitive rates, and providing other financial services to its members.[1][2][3]….
      Not-for-profit status
      In the credit union context, “not-for-profit” should not be confused with “non-profit” charities or similar organizations.[20] Credit unions are “not-for-profit” because they operate to serve their members rather than to maximize profits.[21][22][23]

  8. […] Ellen Brown Ellen Brown.com December 12, 2014 Thanks to […]

  9. Isn’t Rule of Law already dead in America? I don’t see anybody being called to account for the many illegal acts of the Bush Administration, or for the many illegal acts that led to the financial crisis of 2008. If Rule of Law is dead, then what difference does a pseudo-legal agreement to honor the BIS power structure’s edicts make? Maybe it’s just another stick that cannot be used to beat big powers, but that can still be used to justify the whipping of small powers.

    I’m at least equally worried about the use of economic sanctions as weapons of war — weapons that, like nuclear warheads, have deadly impact on civilians first and foremost. If we care so much about the global banking system, why do we arrange for it to gain so many millions of enemies, drilling them with lessons of oppression? Is it to assure a marketplace for other, more conventional weapons of war? Or is the best explanation simple stupidity, venality, and immunity from both the restrictions of law and and economic hardship?

    • unfortuneatly, we are in my guesstamation, 99% off track with the constitution, check out itsnotthelaw.com…
      I do think we can drive the banksters out by taking our money out of banks and putting it in a CREDIT UNION…see reply to Paul above and reply to person concerned about his or her retirement account below..

  10. […] https://ellenbrown.com/2014/12/12/bail-in-and-the-financial-stability-board-the-global-bankers-coup/ […]

  11. […] Ellen Brown Web of Debt […]

  12. Reblogged this on wchildblog.

  13. Reblogged this on Palanthir and commented:
    För de som inte känner till dessa strukturer så kan det ju vara bra med lite fundamenta.

  14. Reblogged this on Spartan of Truth.

  15. […] The Global Bankers’ Coup: Bail-In and the Shadowy Financial Stability Board Why Citi May Soon Regret Its Big Victory on Capitol Hill New G20 Rules: Cyprus-style Bail-ins to […]

  16. Reblogged this on Satu Insan – Malaysia.

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  18. […] The Global Bankers’ Coup: Bail-In and the Shadowy Financial Stability Board […]

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  21. […] started the current financial/economic crisis in 2008 – are now starting its 2. phase Web of Debt 12 Dec. 2014: On December 11, 2014, the US House passed a bill repealing the Dodd-Frank […]

  22. […] die laufende Finanz/Wirtschaftskrise 2008 aus – und startet nun deren 2. Phase Web of Debt 12 Dec. 2014: Am 11. Dezember 2014 verabschiedete das US-Repräsentantenhaus einen […]

  23. […] die laufende Finanz/Wirtschaftskrise 2008 aus – und startet nun deren 2. Phase Web of Debt 12 Dec. 2014: Am 11. Dezember 2014 verabschiedete das US-Repräsentantenhaus einen […]

  24. […] Continue reading from original source here: The Global Bankers Coup: Bail-In and the FSB […]

  25. MONEY out of banks into CREDIT UNIONS….

    http://en.wikipedia.org/wiki/Credit_union

    In part;
    Tension has always existed between member-owned cooperative credit unions and for-profit banks in the United States. When credit unions were first organizing in the US in the early 20th century, the banking industry was opposed, remaining so ever since.
    The FDIC does not provide deposit insurance for credit unions, which are insured by the National Credit Union Administration (NCUA).

    https://en.wikipedia.org/wiki/National_Credit_Union_Administration

    The National Credit Union Administration (NCUA) is the independent federal agency created by the U.S. Congress to regulate, charter, and supervise federal credit unions

    http://en.wikipedia.org/wiki/Credit_union

    A credit union is a member-owned financial cooperative, democratically controlled by its members, and operated for the purpose of promoting thrift, providing credit at competitive rates, and providing other financial services to its members.[1][2][3]

  26. […] with no public bank. That’s a fair question, since too-big-to-fail Wall Street banks can now “bail in” and gobble up depositors’ funds if they go under due to losses in shady, speculative […]

  27. […] with no public bank. That’s a fair question, since too-big-to-fail Wall Street banks can now “bail in” and gobble up depositors’ funds if they go under due to losses in shady, speculative […]

  28. […] — source ellenbrown.com […]

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  30. […] Greek Capital Controls To Remain For Months As Germany Pushes For Bail-In Of Large Greek Depositors http://www.zerohedge.com/news/2015-07-26/greek-capital-controls-remain-months-germany-pushes-bail-large-greek-depositors Dear CFTC: Here Is Today’s Illegal “Spoofing” In Gold Futures http://www.zerohedge.com/news/2015-07-24/dear-cftc-here-todays-illegal-spoofing-gold-futures US Mint Sells Most Physical Gold In Two Years On Same Day Gold Price Hits Five Year Low http://www.zerohedge.com/news/2015-07-24/us-mint-sells-most-physical-gold-two-years-same-day-gold-price-hits-five-year-low Too Big to Fail: The FDIC Went Bankrupt Last Summer http://www.garynorth.com/public/6025.cfm FDIC & Bank of England Create Resolution Authority for Unlimited Cyprus-Style “Bail-Ins” for TBTF Banks!  http://www.silverdoctors.com/fdic-bank-of-england-create-resolution-authority-for-unlimited-cyprus-style-bail-ins-for-tbtf-banks/ The Global Bankers’ Coup: Bail-In and the Shadowy Financial https://ellenbrown.com/2014/12/12/bail-in-and-the-financial-stability-board-the-global-bankers-coup/ […]

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