Banking Union Time Bomb: Eurocrats Authorize Bailouts AND Bail-Ins

Ellen Brown • • March 29, 2014

As things stand, the banks are the permanent government of the country, whichever party is in power.” – Lord Skidelsky, House of Lords, UK Parliament, 31 March 2011

On March 20, 2014, European Union officials reached an historic agreement to create a single agency to handle failing banks. Media attention has focused on the agreement involving the single resolution mechanism (SRM), a uniform system for closing failed banks. But the real story for taxpayers and depositors is the heightened threat to their pocketbooks of a deal that now authorizes both bailouts and “bail-ins” – the confiscation of depositor funds. The deal involves multiple concessions to different countries and may be illegal under the rules of the EU Parliament; but it is being rushed through to lock taxpayer and depositor liability into place before the dire state of Eurozone banks is exposed.

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County-owned bank prospect stirs debate at council meeting

James Halpin • • March 26, 2014

The prospect of starting a county-owned bank generated contentious debate during the Luzerne County Council meeting Tuesday night, with several members of the public questioning its feasibility.

Council Vice Chairman Edd Brominski has suggested creating a public bank to alleviate the county’s massive debt. He hosted a breakfast seminar Monday morning in which Mike Krauss, a director of the Public Banking Institute, said such a facility could help reduce government debt and slash interest rates while keeping county money local.

The bank would assist local banks with capital for loans and would not compete with them, Krauss said. Krauss suggested money that has been “squirreled away,” such as pension funds, could fund the endeavor.

That has been a sticking point.

Kevin O’Brien, a former deputy director of the Luzerne County Emergency Management Agency, questioned Tuesday whether it would be legal to use pension funds in such a manner and whether shareholders would have a say.

“What I’m concerned about is my investment in the pension fund,” O’Brien said. “I worked for this county for 30 years and I enjoy my retirement.”

County solicitor David Pedri noted the concept is in its early stages but said any borrowing from the pension fund would have to be approved by the Luzerne County Retirement Board.

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County-owned bank could ease money issues

James Halpin • • March 25, 2014

Creating a county-owned bank could reduce government debt, slash interest rates and even be a source for immediate emergency funding during floods, according to the Pennsylvania Public Bank Project.

Mike Krauss, a director of the Public Banking Institute and the project’s chairman, told a group of local leaders, including several Luzerne County Council members, during a breakfast meeting Monday morning that a public bank would be a “banker’s bank” that would not compete with local banks.

“The main function of the kind of bank we’re proposing is to partner with local banks,” Krauss said. “It is not a retail bank. It does not compete with the local banks, and because it doesn’t do that, it has a very low cost overhead.”

Council Vice Chairman Edd Brominski organized the event at the Best Western Genetti Hotel and Conference Center as part of a fact-finding mission to begin a financial recovery for the county, which is more than $400 million in debt.

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