Your money belongs to the bank

Banking Regulations – You Don’t Own Your Money – The Bank Does

I wrote about this shortly after the G20 changed banking regulations during 2014. What did they do? Well, in essence, should there be a banking crisis, they ensured that you will likely not get your money back. They essentially changed your status from a depositor, to an investor. The instant you make a bank deposit, that money becomes theirs, not yours. Sure, they promise to give it back to you upon request (good luck trying to get any substantial amount of cash). However, again, should there be an unwinding financial crisis or collapse (more and more likely), you will never see your money again, or very little of it at best…

I would like to repost what I wrote during December 2014, as a reminder that whatever ‘money’ you may have in a financial institution – is technically not yours. Think about that…

During the next banking crisis, any ‘money’ that you have in the bank will be ‘bailed-in’.

If you think that your money in the bank is protected by the FDIC, think again.

Under the FDIC, US deposits up to $250,000 are protected by federal deposit insurance. HOWEVER, the insurance funds are entirely inadequate to handle a major collapse. The statutory minimum that they reserve is apparently 1.35 percent of all deposits. It seems to me that even if only one major (too big to fail) bank fails, there will be nowhere near enough insurance money. And if the derivatives market unwinds, everyone will be SOL.

During the G20 meeting (mid-November, 2014), the member nations decided that your bank deposits will become property of the bank.

This means that should there be a crisis, the bank will be able to pay off their creditors first (if there’s any left to pay). And the money will no longer be yours. The new rules essentially change the status of you as a depositor (of your money) to that of an investor in the bank. And as with any investor in the stock market (for example) you will be subject to losing your money. The depositors are now responsible for bailing-in the banks for any losses during a banking crisis.

Banking Derivatives: Interbank contracts, bets, hedges. How big is the derivatives market? The total notional amounts outstanding for contracts in the derivatives market is estimated between $600 trillion and a $Quadrillion (updated 2023). Though the gross market value of all contracts is said to be significantly less (though still astounding).

Under the new rules (for example), if the derivatives bubble begins to burst/unwind, and you rush to the bank to withdraw your money (or assume that you will be protected by FDIC insurance), good luck with that. Remember, your deposits become property of the bank. And the FDIC here in the US has ~ 1.35% as a backup.

Within the ‘Executive Summary’ of the (IMF) International Monetary Fund paper, From Bail-out to Bail-in: Mandatory Debt Restructuring of Systemic Financial Institutions, we find one definition of ‘bail-in’ as follows:

Bank Bail-in

Emphasis added:

Bail-in, a statutory power of a resolution authority (as opposed to contractual arrangements, such as contingent capital requirements) to restructure the liabilities of a distressed financial institution by writing down its UNSECURED debt and/or converting it to equity. The statutory bail-in power is intended to achieve a prompt recapitalization and restructuring of the distressed institution.

A few points of note, and ‘unsecured’ debt:

What was formerly called a “bankruptcy” is now a “resolution proceeding.” The bank’s insolvency is “resolved” by turning its liabilities into capital. Insolvent banks are to be “promptly recapitalized” with their “unsecured debt”. In other words, your deposits go to the banks creditors.

“Unsecured debt” includes deposits, the largest class of unsecured debt of any bank.

During bank failure, creditors will have first priority for any funds which may be available for pay out.

Since bank depositors money is now considered to be ‘unsecured debt’, the deposits will essentially be converted to bank equity – which means that the depositors will become last to be paid out. And there might not be any money left to be paid out.

What are we to do with this information?

Tangible assets have real value. These tangible assets vary for everyone. Point being, in the end, paper money is just that – paper.

I used to be a depositor in one of the too-big-to-fail banks. Many years ago I switched to a financially-sound credit union. I feel a lot better about that.

Also, apart from setting aside monies for regular bills, a chunk for emergencies, and securing some retirement investment money, I feel better about money in hand (a safe) rather than a bank. And/or tangible hard assets in my immediate control. Especially those that contribute towards self-sustainability (debt-free home, land, etc..).

[ Read: The Banking Pyramid Scheme ]


  1. I keep only enough to pay the monthly bills “in the bank”, plus $1000 to avoid all banking fees. Anything else goes into tangible assets. I figure the 1k is lost….so don’t count on it ever being available….but could one day be surprised, who knows.

  2. Mama always said “Don’t keep your eggs in one basket.”
    Better to be a Squirrel.

  3. As mentioned today, and by others previously, the fun begins when pulling “your” money from a bank. $10k limit before formal bank reporting (might be a lower amount now, I’m not current on the law), lesser and regular withdrawals must avoid being viewed as laddering (sneaking up on the $10k). I get why $10k and laddering tripwires are there, primarily to catch laundering or illegal profits.
    Even legitimate cash transfer from a retirement investment account to a bank account then starts the withdrawing effort from a different asset stream.
    Then our friendly feebs have the required minimum withdrawal from a tax free account (rollover IRA as an example) for folks hitting 73 this year, into the banking system that goes.
    If our prepaid, trust held, cremation dollars goes poof, probably get tossed in a woods hole or the burn pit. But, if I’m gone I’ll be WGAF anyway.

    1. Remembered the term “structured” ?
      If your caught.. removing your money in large amounts in a suspicious way (below 10k” your account(s) can and will be frozen.
      You need to prove somehow you were not in the processes of or trying to do anything bad with your own money.
      Pretty F’d up.

    2. Hey Grey, I agree with you but as far as the trip wire for money laundering I see that a bit differently. Every time the teller gives me that line I smile but in my mind I am thinking, “us little people are not the ones doing the laundering —the real money launderers made up the rule to cast suspicion on us while they launder away.” IMHO the real thieves are the elite, politicians who make these rules, and the devil.

  4. “If you don’t have it in your possession, you don’t own it !”
    It’s as true now, as it always has been throughout history.
    When “TSHTF”, as it inevitably will sooner or later, that’s exactly what will happen.

  5. Dear mister bank owner/manager please remember in the event of your restricting our access to our money we know who you are and where you live. This is not a threat but a promise.
    In the mean time I have withdrawn almost all of my money from the bank over the years and converted the paper into PM or other tangible assets. I maintain a little cash in the bank for paying a few bills.

    1. Bank owner/manager only follows orders from on high.
      He’s not responsible for your money, you are and he’s just as screwed as you are in a bank holiday.

      1. With a bank manager it’s more true than a cop. An individual cop chooses to leave the police car to enforce someone’s laws that he can ignore by staying in the car and is 100% responsible for it. Just following orders is not an excuse when you can stay in your car and not do it and not see it. A bank manager doesn’t have possession of the money and is just an employee. Most banks are owned by shareholders which include all of us either through individual shares or owning index funds in our retirement accounts. The bank management acts in the collective interest while the cop can 100% choose to not harm an individual by enforcing illegal age and abusive laws of tyrants.

  6. If China and Russia are aligned look for them and any allied with them to completely dump the dollar when Russia pulls out of Ukraine,

  7. Well, maybe you can explain to me how the federal government would pay you back when they directly and intentionally steal from you aka bail in banks with your money ?
    That is not theft, they made the laws you must follow.
    Canadian Deposit Insurance Corp will not cover that, just like the Cyprus bail-ins, it’s gone.

    There sure a lot of wishful thinking out there or disillusion.
    Cognitive dissonance?

    1. If i remember right our CONgress passed some laws a while back that basicly approved bail ins as a method for banks to remain solvent in a crises

      1. Financial reforms ushered in with the Dodd-Frank Act(2009-2010) eliminated bailouts and opened the door for bail-ins.

        FDIC Bankers Discuss ‘Bail-Ins’ To Deal With Impending Market CollapseJan 1, 2023

        I love the idea of politicians hanging from lamp posts.

        1. I’ll donate the rope. Streets full of wind chimes is a good start.

    2. It is theft. Just because a tyrannical entity passes laws does not mean it’s not theft. Just because a cop enforces someone’s laws does not mean he isn’t responsible for harming others and isn’t committing kidnapping, murder, assault, theft, and menacing.

  8. Ken, Are credit unions included along with the banks in this madness?

  9. Even if it is in your possession, you don’t own it. It’s called civil asset forfeiture. You don’t need to be charged with any crime.

  10. Hide your money before it’s to late. I don’t trust the banks any more. The government is in trouble and will steal your assets. We are headed for extreme difficulty no matter how you slice it. If I cant hold it in my hand I don’t own it. I advise to get out of fiat money with savings. Buy real assets such as food, tools, guns and amo. Spend on things you have put off. repair everything you can. I am investing in my garden and solar array enhancement. Get all vehicles in top working order. When the S–t finally hits the fan cash will become toilet paper before your eyes. Remember you can’t eat gold and silver. A barter system will develop over time but for a while we will need to be totally self sufficient. I try to think in terms of what we will actually need to survive when it all shuts down. There are some things money cant buy. Love of God and family come first.

  11. It occurs to me that the bail-in is exactly the same thing that is going on in China. The banks get in trouble, due to the mortgage rebellion, so they just steal the depositors’ money. Is America slipping toward some form of communism? I don’t think people are nearly as scared about this as they should be.

  12. The precedent for this is Cyprus. Depositors were given haircuts on their deposits and were given shares which hopefully would make them whole in a few years.

    This does not mean we shouldn’t use banks. It’s the same with stocks. We have to use what’s available to us and take advantage of stock investments to grow our wealth. If a situation happens bigger than 2008 or Covid shutdowns and the economic system can’t survive without massive defaults, all the account balances will go away or be severely cut. The U.S. is still economically strong and all other major economies minus Russia are no better off debt wise so the good times can continue for 20 years or 100 years. Not investing in stocks and not using the banking system isn’t helpful. What’s helpful is to own some real estate outside of cities, have a smattering of gold and silver, and be well stocked with survival supplies and ammo. Gold and silver would equally be worth a lot less in a major economic event so not putting money in the bank isn’t help. Spreading money around by gifting your kids the annual exclusion and keeping some accounts separate in non community property state can help with asset protection from lawsuits and bankruptcy. This also includes 401Ks, IRAs up to 1.3 million indexed to inflation, and the homestead exemption.

  13. The recent bank collapse of Silicon Valley Bank, Signature Bank, and now I’m hearing about the potential contagion for some others… It brings home the message that if you don’t hold it, you don’t own it. In other words, tangible assets that you own free-and-clear, versus paper promissory notes with counterparty risk.

    1. Ken J.,

      Not to worry…rumor has it that a group of U.S. senators has offered to rescue SVB by making a cash offer…pending approval from their banks in the Ukraine.

      1. Hahaha! It’ll only work if the ‘big guy’ gets his 10%. I’m sure they’re working out the deal as we speak…

    2. Ken,
      Most people are oblivious, astounding how many elderly in that number, they think their Charles Schwab portfolio is safe,
      Just cant get through to the ones in my life

  14. MSB’ers can you help me out here? I don’t really understand what just happened.

    Sunday night, what I researched was a disaster in the making on Mon morning. The Feds showed up with their lies and a whole bunch of money, We’re from the Gov’t and here to help. NYSE had to halt trading on over 30 banks, because they were getting trashed FDIC said depositors were gonna get their money, but investors were not covered.

    Tues morning and these banks stock is recovering very fast. No bank runs, no failures, No panic. The Sheeple bought the Gov’t bullshit hook-line-and sinker.!

    Is this what really just happened?

    1. SMG, In my opinion, which I’ll stand by, our country is being pillaged by the unelected banksters and their friends. The corruption is mind boggling, and the rule of law is illusory. The “Fed’s” interest rate hikes destroyed the value of the long term t-bills SVB was holding, but no worry. The big depositors are in the club. They will walk away whole, either because they got the heads up to withdraw ahead of time, or because they’ll be made whole and we’ll get the tab. By the way, a lot of those depositors are foreign companies and institutions – we’ll never know all of them, but some have popped up. At the same time, an awful lot of the languaging seems designed to spook people into pulling their money out of small and regional banks, and moving it over to the big banks. Also by design. Consolidation and control. I don’t pretend to know how the stock market actually works; seems like a bunch of algo’s trading against themselves, with the little guys being played.

      Does anyone actually think the billions of dollars free-flowing to Ukraine are for Ukraine? It’s looting. Since the local banks are now being targeted, I’m thinking the financial collapse is close at hand. And the rules are whatever the ruling class says they are, so long as the sheeple keep on sheeping.

      Time to clean out the coop. Hope everyone is prepping themselves silly. Might want to start focusing more on security.

  15. “Hey Janet, what the heck is going on over there at Treasury?”
    “What do you mean Mr. President?”
    “This crap about y’all honoring that FOIA request on those 150 suspicious multi-million dollar transactions the Treasury Department flagged between Hunter and the family and the Chinese. How the heck are we going to keep this out of the news?”
    “Don’t worry Mr. President, how about we go ahead and move on closing a few banks….that should do it.”
    “Whew! Thank you Janet. That brain of yours is why we brought you on board”
    “No problem Mr. President. Don’t forget to make the standard donation to the Yellen Family World Do-Gooder’s Foundation.”

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