Happy 2nd Birthday Bail-in Tool! We Suggest Gold As The Perfect Gift

– Two years since bail-in rules officially entered EU regulations

– EU bail-in rules have wiped out billions for savers and and businesses, with more at risk

– Future of many failing banks now rests on depositors who may no longer be protected by deposit insurance

– Physical gold enables savers to stay out of banking system and reduce exposure to bail-ins

– For more listen to our Goldnomics Podcast: What does 2018 have in store for financial markets?

Ah, New Year’s resolutions, what fun. For some reason we opt to commit to fairly big life changes at some point between Christmas and New Year. This is a time when the real world seems a lifetime away from the cosiness of the holiday season. We often make a resolution when we have had too much of something, perhaps booze, perhaps food or perhaps it is based on regrets from the previous year. Despite best intentions, rarely do we stick to them.

May we make a suggestion? If you’re going to make any resolutions this year make one that is pretty easy to stick to and that won’t make too much of a short-term impact on your life: resolve to pay attention to and to protect yourself from the threat that is ECB bail-in tools. In the long-term you’ll be more grateful you did this than if you had given up cursing or drinking for a month.

On the 1st January 2018 the ECB bail-in tool will be two years old. That’s right just over two years ago the ECB decided that it was better to force the financial burden of banks’ failures away from the state and instead onto bondholders and creditors i.e. those with money in the bank.

The ECB was following in the footsteps of the US where bail-ins have been part and parcel of financial legislation since the crisis of 2007-08. Canada has more recently joined the party.

We have relentlessly covered the threat of and developments in bail-in legislation over the last two years. It is perhaps the most shocking decision to come out of regulators and central banks since the financial crisis. It is even more shocking when one considers the lack of uproar from the financial media who continue to peddle the myth that the financial system is more secure than pre-financial crisis.

The bail-in legislation has been put in place because the EU, along with the rest of the world, has been through a horrendous financial crisis. It exposed such dangers in the banking system that it has taken nearly a decade for global regulators to agree to post-banking crisis rules. Just this month Basel III was agreed. The whole aim of the agreement is to protect governments by having private investors suffer losses first during banking crises.

One has to ask, if politicians are so keen for us to believe in the stability of the financial system in those problem areas why the need for legislation that not only places depositors at risk but has been updated continuously to put them at even more of a disadvantage?

2018 should be a time when investors and savers resolve to take charge of their wealth and hold it outside of the banking system. Physical gold that is allocated and segregated is able to offer this, as well as zero exposure to the bail-in regime. You can hear more about our expectations for 2018 in our new Goldnomics podcast.

What is a bail-in?

A quick refresher from our free guide to bail-ins:

A bail-in is when regulators or gov