A government Senator has contradicted Treasury and the ex-banker who controls the Senate Economics Committee and confirmed that the APRA crisis resolution powers legislation sneaked through Parliament in February is a “bail-in” law.
Queensland LNP Senator Amanda Stoker’s explanation of the Financial Sector Legislation Amendment (Crisis Resolution Powers and Other Measures) Act 2018 proves that there is confusion in the government on this law, and therefore it needs urgent clarification through an amendment to explicitly state what the government claims—that it will not bail in bank deposits. (See below for instructions on demanding an amendment.)
Senator Stoker, a top barrister who has been a prosecutor as well as a judge’s associate in both the Queensland Supreme Court and High Court of Australia, explained in a 5 November 2018 letter to a constituent:
“The legislation facilitates bail-in as a type of resolution power which is available for dealing with financial institution distress. This was done after the G20 leaders endorsed a new Financial Stability Board standard for Total Loss-absorbing Capacity. Specifically, it builds on the Key Attributes which specifies that Financial Stability Board jurisdictions should have in place legally enforceable mechanisms to implement a bail-in. The purpose of the Total Loss-absorbing Capacity standard ensures there are mechanisms in place to stop the ‘domino effect’ and reduce loss on [sic] bank shareholders, creditors and the Government.”
This is the most accurate description of the Act ever to come from the government or a parliamentarian of either major party. Senator Stoker confirms: a) the law does implement bail-in for Australia; b) the bail-in mechanism is based on the Financial Stability Board’s (FSB) “Key Attributes”; and c) the intent of bail-in is to prop up a failing bank with the money of its creditors so it doesn’t trigger contagion in the wider banking system, i.e. it sacrifices the customers of a failing bank or banks to supposedly save the banking system. http://cecaust.com.au/releases/2018_11_20_Confirmed_APRA_Law_P.html
