You must own PHYSICAL GOLD SILVER PLATINUM. You all must. The BIS has a “Financial Stability Institute”, the FSI, who put out a report today. “Public support for bank resolution”. Read it and understand what you will face in just a few years maximum. Get ready. It is planned and well documented.

The BIS has a “Financial Stability Institute”, the FSI, who put out a report today.

Their big idea?

To use taxpayers funds as the lender of last resort, instead of the central bank as the lender of last resort.

The FSI and BIS see bank failures coming up, lots of them, and they say the banks don’t have enough funds to run even the critical functions while they’re being bought out.

And the central banks (the, ahem, lenders of last resort) are tapped out, so…

They’ve decided that because financial stability (their one job… that they failed at) is a public good, they should use the public’s money to save the system the central bank system failed to keep stable.

They even word it as a natural thing to do – the public will be saved from the fall out of commercial bank failures, so we should use the public’s money to save those banks. Gaslighting the public.

But they’re afraid citizens won’t like using their funds to bail out private companies (with big bonuses) who are failing, naturally, and that if the BIS gives banks a free bail out of citizen money the banks will go crazy with risk, of course. So the FSI’s big idea?

To take public funds from govs and invest them into a fund. A fund that bails out the banks. Hiding the direct bail out behind a fund name. A fund that bails out failing banks.

https://www.bis.org/fsi/publ/insights67_summary.pdf

The report from the Financial Stability Institute (FSI) of the Bank for International Settlements (BIS) indeed raises significant concerns about the future of financial stability and the mechanisms proposed to address systemic risks. The idea of using taxpayer funds as a “lender of last resort” through a bailout fund is controversial, both economically and ethically, and it highlights the precarious state of global financial systems.

Key Takeaways from the FSI Proposal:

Public Funds as a Backstop: The FSI suggests creating a fund, sourced from taxpayer money, to bail out failing banks during crises. This shifts the responsibility from central banks (traditionally the lender of last resort) to governments and, ultimately, taxpayers.

Framing Bailouts as a “Public Good”: The report argues that financial stability is a public good, and therefore, public funds should be used to maintain it. This framing attempts to justify the use of taxpayer money to rescue private institutions, despite the moral hazard and public backlash such actions often provoke.

Concerns About Moral Hazard: The FSI acknowledges that direct bailouts could incentivize banks to take excessive risks, knowing they’ll be rescued. To mitigate this, they propose a structured fund rather than ad hoc bailouts, but the underlying issue of rewarding risky behavior remains.

Public Perception and Gaslighting: The report seems to anticipate public resistance to the idea of using taxpayer money to save private banks, especially given the history of large bonuses and risky behavior in the financial sector. By framing the bailout mechanism as a fund rather than direct intervention, the FSI appears to be attempting to obscure the true nature of the proposal.

Central Banks “Tapped Out”: The suggestion that central banks are no longer capable of acting as lenders of last resort is alarming. It implies that the financial system is under severe strain and that traditional tools for maintaining stability are insufficient.

Implications of the Proposal: * Erosion of Trust: Using taxpayer money to bail out private banks, especially under the guise of a fund, risks further eroding public trust in financial institutions and governments. Many citizens already view bailouts as unfair, benefiting the wealthy at the expense of the broader population. * Moral Hazard: The proposal could encourage reckless behavior in the banking sector, as institutions may feel insulated from the consequences of their actions. * Accountability and Transparency: The creation of a bailout fund raises questions about oversight and accountability. Who will manage the fund? How will decisions be made about which banks to rescue? Will the public have visibility into these processes? * Economic Risks: If governments divert significant taxpayer funds into such a bailout mechanism, it could strain public finances, especially in countries already facing high debt levels.

Broader Context: The FSI’s proposal reflects deeper systemic issues in the global financial system. Despite years of reforms following the 2008 financial crisis, many banks remain undercapitalized and vulnerable to shocks. The reliance on public funds to address these vulnerabilities suggests that the safeguards put in place after the last crisis may not be sufficient.

Public Reaction: It’s likely that this proposal will face significant backlash from citizens, policymakers, and economists. The idea of using taxpayer money to rescue private banks—especially when those banks have a history of risky behavior and large executive bonuses—will be deeply unpopular. The framing of the bailout mechanism as a fund may not be enough to assuage public concerns.

Conclusion: The FSI’s report underscores the fragility of the global financial system and the challenges of maintaining stability in the face of systemic risks. While the idea of a bailout fund may be intended to provide a structured approach to crisis management, it raises serious ethical, economic, and political questions. Ultimately, the proposal highlights the need for deeper reforms to address the root causes of financial instability, rather than relying on taxpayer-funded safety nets.