Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1697646131563.pdf (Australia)
TO: The Senate Economics Legislation Committee RE: Banking Amendment (Deposits) Bill 2020 It is my will that you support the Banking Amendment (Deposits) Bill 2020 introduced by One Nation Senator Malcolm Roberts on 27 February.

The bill seeks to amend the bank “bail-in” law.

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.


The government, which claims deposits won’t be bailed in, have to “put it in writing”, in legislation, where it counts.

In every other country in the world where ‘bail in’ laws exist, it applies to deposits.

The Government claims it wont use deposits but the broad wording of the law leaves too much uncertainty.
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.
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.” 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).
…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”— 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.

This bill passed into law on 14 February 2018 with only eight Senators present.

It seems a little sneaky.

Why?


There is 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.

the Banking Amendment (Deposits) Bill 2020 must be passed If the government is genuine in saying it won’t ‘bail in’ deposits.
It will clarify the law and provide evidence that they do not intend to ‘bail in’ deposits.

Andrea Spicer Banking Amendment (Deposits) Bill 2020Submission 26