Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1697646160774.pdf (Australia)
I am writing in support of the Banking Amendments (Deposits) Bill 2020 which will protect bank deposits from the “bail-in” provisions contained in the Financial Sector Legislation Amendment (Crisis Resolution Powers and Other Measures) 2018.

I urge the government to recognise that in its current state, the Financial Sector Legislation Amendment (Crisis Resolution Powers and Other Measures) 2018 contains a clear provision for bank deposits to be bailed-in, ie.
used to prop up a failing financial institution.

The terminology “other instruments”, “write-offs” and “conversions” can clearly be used to define bank deposits.

There are also huge implications for bonds, superannuation funds and insurance policies.

To date, the government has repeatedly claimed that “there are no bail-in provisions” in the 2018 amendment.
However, there has been no definitive proof of this, and the fact that the legislation does not definitively state that deposits are protected is clear proof that deposits are at risk.

Australians have a right to a clear and unambiguous provision in the legislation that protects their deposits.

I have read through the legislation and I am very concerned about many aspects of it.
Aside from the clear bail-in provisions, there are many problematic aspects of the Financial Claims Scheme (FCS) that most people are unaware of.

Firstly, the scheme must first be activated – something that is not automatic as the legislation currently stands.

There are many hurdles that must be jumped before APRA will activate this scheme, and I do not have faith that it will ever happen.
In the unlikely case of the FCS being activated, as I read it, the legislation states that each financial institution has a limit placed on the amount of money it will be issued with.

That money must be distributed amongst all of the depositors who have lost their money.

So depending on the size of the financial institution, there is no guarantee that each depositor will receive the $250,000 they were “guaranteed”.
The larger the financial institution, the less likely it is that each depositor will be adequately covered.

It is essential that the specific provisions of the FCS be assessed, because I believe that the claims being made by the government to the effect of “Your money is guaranteed by the FCS” are false claims.
If the government refuses to pass the Bill proposed by Senator Roberts, I will require confirmation in writing that my bank deposits, superannuation funds and insurance policies are 100% secure from bail-in (or any other term used to describe the act of appropriating my funds to prop up a failing financial institution) and that the FCS will cover 100% of any losses I do incur.
If my assessment of the legislation and the FCS are accurate, and I lose personal and company funds in an inevitable banking crisis, then I will hold all politicians, public servants and others who were involved in the drafting and passing of the Financial Sector Legislation Amendment (Crisis Resolution Powers and Other Measures) 2018 personally accountable for my losses.
I will also hold personally accountable, those who have refused to act on the demands of constituents to include a clause to protect deposits.

For some years now, many constituents have been pointing out the gaping holes in this legislation and voicing their concerns over the risk this legislation poses to their life savings, their insurance policies and their superannuation funds.

We are simply asking for a simple and unambiguous clause to clearly protect our deposits.
The politicians, public servants and others whose inaction causes constituents to lose money will be made personally accountable for their failure to act on the demands of the public.
Banking Amendment (Deposits) Bill 2020Submission 38 The following passages may provide the committee with some background information on the legislation being discussed – The financial crisis of 2008 ushered in the term “too big to fail” which regulators and politicians used to describe the rationale for rescuing some of the country’s largest financial institutions with taxpayer-funded bail-outs.
Heeding the public’s displeasure over the use of their tax dollars in such a way, Congress passed the Dodd-Frank Wall Street Reform and Consumer Act of January 2010, which eliminated the option of bank bailouts but opened the door for bank bail-ins.

With a bank bail-in the bank uses the money of its unsecured creditors, including depositors and bondholders, to restructure their capital so it can stay afloat.
In effect the bank is allowed to convert its debt into equity for the purpose of increasing its capital requirements.

A bank can undergo a bail-in quickly through a resolution proceeding, which provides immediate relief to the bank.

The obvious risk to bank depositors is the possibility of losing a portion of their deposits.
However depositors have the protection of the “Federal Deposits Insurance Corporation” (FDIC) in the US or the “Financial Claims Scheme” (FCS) in Australia, insuring each bank account for up to $250,000.

Banks are required to use only those deposits in excess of the $250,000 protection.

The provision for bank bail-ins in the Dodd-Frank Act was largely mirrored after the cross-border framework and requirements set forth in “Basel III International Reforms 2”for the banking system of the EU.
A serious threat for people’s fiat savings held at commercial banks are “bail-ins”.

In 2014 the European Union adopted the “Bank Recovery and Resolution Directive”.

The implemented rules dictate that when a bank becomes insolvent, the banks’ shareholders and creditors pay the costs through a bail-in mechanism.

Money held at banks is technically a loan to the bank.

This makes depositors “unsecured creditors” of the bank.
Under the current rules, when the bank becomes insolvent deposits will be seized to save the bank.

Outside the EU bail-in rules have been implemented as well.

The reason why people are still holding large sums of fiat money at banks is because many aren’t aware of the risks.
On November 16th 2014 the G20 meeting in Brisbane agreed to the “Adequacy of Loss- Absorbing Capacity of Global Systemically Important Banks” resolution which completely changed the rules of banking and effectively gave the go-ahead for bail-in in many countries, including Australia.

The new rules prioritise the payment of banks’ derivatives obligations to each other, ahead of everyone else.
That includes not only depositors, public and private, but the pension funds that are the largest target market for the latest bail-in play, called “bail- inable bonds”.

Bail-in has been sold as avoiding future government bailouts and eliminating “too big to fail” (TBTF).

But it actually institutionalises TBTF since the big banks are kept in business by expropriating the funds of their creditors.
Banking Amendment (Deposits) Bill 2020Submission 38 In Australia our legislation is called “Financial Sector Legislation Amendment (Crisis Resolution Powers and Other Measures ) 2018” passed on February 14th and it allows for bail-in under the terms “other instruments” and “conversion or write-off”.

On February 27th 2020 Malcolm Roberts introduced the “Banking Amendments (Deposits) Bill (2020) to protect deposits from bail-in.
The Senate Economics Legislation Committee launched a new inquiry into the bill.

The bill seeks to amend the infamous bank “bail-in” law snuck through Parliament on Valentine’s Day 2018 (with just eight Senators present), it will close a broadly-worded loophole so that its “conversion or write-off”(a.k.a.

bail-in) provisions cannot apply to bank deposits.


Australia is a member of the G20 which in 2009 directed the Financial Stability Board (FSB) at the Bank for International Settlements (BIS) to develop a policy to resolve future banking crises without needing taxpayer bailouts.
Instead of requiring banks with deposits to stop the reckless financial gambling in derivatives that caused the 2008 crash, the FSB developed the abominable policy of “bail-in” to make depositors pay to prop up (resolve) banks when they fail.
As a G20 member Australia endorsed FSB’s 2011 “Key Attributes of Effective Resolution Regimes”, of which Section 3.5 “Bail-in within resolution” mandates that banking authorities must have the power to “write down”, or “convert into equity”, “unsecured creditors”, which by definition includes depositors.
The nations and jurisdictions Australia is closest to all have bail-in powers that apply to deposits; these include the USA, UK, EU, Canada, and most significantly, New Zealand, which has the most explicit deposit bail-in policy called Open Bank Resolution, and where the major banks are all subsidiaries of Australia’s big banks.
In April 2013, a month after bail-in was applied for the first time to deposits in two banks in Cyprus, an FSB report called “Implementing the FSB Key Attributes of Effective Resolution Regimes—how far have we come?” revealed that “bail-in … legislation is in train … in Australia”.
After some delay, in October 2017 the Turnbull-Morrison government introduced its bail-in law, the Financial Sector Legislation Amendment (Crisis Resolution Powers and Other Measures) Bill 2017, at a time when pressure was building on G20 countries to comply with the FSB’s bail-in regime.
In November 2017 ratings agency Moody’s complained in a release that among Asia-Pacific banking systems “only Hong Kong and New Zealand authorities have the power to bail in depositors” and that the rest of the region, which includes Australia, continues to lag behind Europe and North America “in implementing bank resolution and bail- in regimes as prescribed under the FSB’s framework”.
The 2017 Crisis Resolution bill, now law, empowers the bank regulator APRA to order the bail- in of certain Tier 1 and Tier 2 capital securities which include bail-in in their terms and conditions, known as contingent convertible (co-co) or “bail-in” bonds; however, Section 11CAA Definitions defines that “conversion and write-off provisions” relate to: “(a) Additional Tier 1 and Tier 2 capital; or (b) any other instrument.” (Emphasis added.)
Legal analysis confirmed that this broad language creates a loophole that could extend a bail-in to include deposits.
Banking Amendment (Deposits) Bill 2020Submission 38 The 9 February 2018 report of the Senate Economics Legislation Committee’s inquiry into the Crisis Resolution bill admitted the bill was based on the FSB’s Key Attributes (which include deposit bail-in): “The legislation proposed in the bill draws on these criteria in forming its plan for financial crisis resolution and resolution planning.” In response to submissions from the Citizens Party (then CEC) and thousands of concerned Australians, the government, Treasury, RBA, APRA and ASIC all claimed the bill would not bail in deposits and that deposits are protected up to $250,000 per person per bank through the Financial Claims Scheme (FCS).
However, former APRA Principal Researcher Dr Wilson Sy pointed out that the FCS rules state it must first be “activated” for the deposit guarantee to apply, and there is no obligation on the government to activate it; then-Treasurer Scott Morrison conceded in a February 2018 letter to Ken Wyatt MP that “the government retains discretion to activate the FCS when an institution fails”— an admission that would surprise most Australians and even politicians who assume it is an iron-clad guarantee currently in force.
Moreover, the FCS is intended to apply only when a bank fails, whereas bail-in is intended to be applied earlier to avert a bank failure, so it does not protect deposits against a bail-in.
The bill passed into law on 14 February 2018 in suspicious circumstances wherein the government rushed it through in the Senate with only eight Senators present and while the two Senators from Pauline Hanson’s One Nation weren’t in the chamber, despite One Nation having informed the government they intended to move an amendment to explicitly exclude deposits from being included in “any other instrument”.
Later in 2018 economist John Adams and banking expert Martin North demonstrated, confirmed by independent legal opinion, that banks are able to change the terms and conditions of deposit accounts under orders from APRA and virtually without notice to enable the deposit accounts to be bailed in under the 2018 law.

It is not good enough for the government to say its 2018 law won’t apply to deposits—the legislation must say it can’t.
That’s what the Banking Amendment (Deposits) Bill 2020 will do, but it will not change the rest of the law in any way.

If the government is genuine in saying it won’t bail in deposits, it will support this bill to put it in writing and thereby clarify the law; if it does not, the question is why would they prefer to keep it in doubt unless they really do intend to bail in deposits?
Tragedy and Hope (page 324) “In addition to these pragmatic goals, the powers of financial capitalism had another far- reaching aim, nothing less than to create a world system of control in private hands able to dominate the political system of each country and the economy of the world as a whole.

This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent private meetings and conferences.
The apex of the system was to be the Bank for International Settlements in Basle, Switzerland, a Banking Amendment (Deposits) Bill 2020Submission 38 private bank owned and controlled by the world’s central banks which were themselves private corporations.” Banking Amendment (Deposits) Bill 2020Submission 38