Austria Does First-Ever Bank "BAIL-IN" Takes Depositor Money to Pay Bank Debts; Citizens left BROKE!

In an astonishing move which could trigger a collapse of European banking, Austria has done a “Bail-in” of a failed bank; seizing depositor money to pay bank debts, leaving citizens broke.  This could be the actual start of a complete systemic banking collapse in Europe as panicked citizens, seeing their fellow depositors wiped out in one fell swoop, start pulling their money out of the banking system.  This has “DISASTER” written all over it. 

Just over a year ago, a black swan landed in the middle of Europe, when in what was then dubbed a “Spectacular Development.” In Austria, the “bad bank” of failed Hypo Alpe Adria – the Heta Asset Resolution AG – itself went from good to bad, with its creditors forced into an involuntary “bail-in” following the “discovery” of a $8.5 billion capital hole in its balance sheet primarily related to ongoing deterioration in central and eastern European economies.

Austria had previously nationalized Heta’s predecessor Hypo Alpe-Adria-Bank International six years ago after it nearly collapsed under the bad loans it ran up when it grew rapidly in the former Yugoslavia. Having burnt through €5.5 euros of taxpayers’ money to prop up Hypo Alpe, Finance Minister Hans Joerg Schelling ended support in March 2015, triggering the FMA’s takeover.

This was the first official proposed “Bail-In” of creditors, one that took place before similar ad hoc balance sheet restructuring would take place in Greece and Portugal in the coming months. Or rather, it wasn’t a fully executed “Bail-In” for the reason that creditors fought it tooth and nail.

And then today, following a decision by the Austrian Banking Regulator, the Finanzmarktaufsicht or Financial Market Authority, Austria officially became the first European country to use a new law under the framework imposed by Bank the European Recovery and Resolution Directive to share losses of a failed bank with senior creditors as it slashed the value of debt owed by Heta Asset Resolution AG.

<snip>  Full story: https://www.superstation95.com/index.php/world/1142