from Kev Moore

Australia’s Authorised Deposit-taking Institutions (ADIs) are quietly taking action to prepare for a potential bail-in of retail bank deposits if a domestic or global financial crisis were to occur.

…………..As noted in my recent article, Deposit Insurance Is No Protection Against Bail-in[2], both Labor and Coalition Governments in the post-Global Financial Crisis era have been part of a global effort to implement a bail-in regime within Australia as part of the crisis resolution framework that would enhance the loss absorbing capacity of systemically important financial institutions.

Moreover as I noted, Martin North from Digital Finance Analytics and I (confirmed by the legal analysis of independent solicitor Robert H. Butler) highlighted that the passage of the Financial Sector Legislation Amendment (Crisis Resolution Powers and Other Measures) Act 2018 has provided APRA and Australian ADIs with a legal pathway to implement a bail-in of retail bank deposits through the amendment of deposit accounts T&Cs that would then incorporate suitable legal ‘conversion or write-off’ clauses……………

Read on –