The Cyprus crisis – as well as the meltdown of financial systems in Spain and Greece, among other places – may be what led one of President Obama’s appointees to the U.S. Federal Reserve’s board of Governors to propose a means of stopping “bank runs” here in America. According to a November report from Reuters news agency, Dan Tarullo, whose specialty is “financial regulation,” has proposed that banking regulators (like him) need to “supplement prudential banking regulation” with more “policy tools” – i.e., the ability to order banks closed. Tarullo and the other fed Governors are working on a new set of such “policy tools” to be unveiled in 2014.
So is the American financial system a safe place to keep one’s private assets? Bloomberg news reported one year ago that the U.S. Federal Reserve was weighing the possibility of trying to force foreign banking institutions to play by the U.S. government’s rules. Today that process has already begun, with Federal Reserve authorities notifying foreign banking institutions that they must report all American-owned assets and enforce American banking rules.
In economic terms, this is called “capital controls” – an effort by the U.S. federal government to control private peoples’ money as much as possible, and prevent it from leaving the country. Over the past six months private banks in Canada and New Zealand have become increasingly stringent with their willingness to hold deposits from Americans, and within the last two days the British territory of the Cayman Islands acquiesced to U.S. pressure and signed a controversial agreement that, for the first time, will require banks there to report all deposits from American citizens to American governmental authorities.
Why is this happening? Officials from the Federal Reserve and the U.S. Department of the Treasury it’s all precautionary. In case another 2008 type financial “meltdown” ever occurs again, so the reasoning goes, the U.S. will have as much control as possible over the global financial system.
But fundamentally, and philosophically, there is an undercurrent to all of these policies and proposals: it is the belief that the wellbeing of the institutions of government is more important that the wellbeing of individual persons, and an individual’s right to possess their own money.
Here’s hoping your team won this weekend. Now let’s figure out how to enable the American citizen to be a winner, once again.
Austin Hill is an Author, Consultant, and Host of "Austin Hill's Big World of Small Business," a syndicated talk show about small business ownership and entrepreneurship. He is Co-Author of the new release "The Virtues Of Capitalism: A Moral Case For Free Markets." , Author of "White House Confidential: The Little Book Of Weird Presidential History," and a frequent guest host for Washington, DC's 105.9 WMAL Talk Radio.
Forget A Federal Marriage Amendment and Go For Religious Freedom Acts In All 50 States | John Hawkins