Federal Deposit Insurance Corporation (FDIC) officials recently discussed how to deal with the next approaching market collapse and hide alarming data from depositors to prevent bank runs, video of a meeting shows.
The FDIC’s Systemic Resolution Advisory Committee (SRAC) held a meeting in November to discuss how the next market crash would occur and what steps would need to be taken to ensure not everybody tries pulling their money out of the financial system at the same time.
“You’ve got to think of the unintended consequences of taking a public that has more full faith and confidence in the banking system than maybe the people in this room do,” one FDIC member noted.
“We want them to have the full faith and confidence in the banking system. They know FDIC insurance is there. They know what works. They put their money in, they’re going to get their money out.”
He claimed that although institutions will soon be able to figure out the dire implications of what’s being discussed at the meeting, the general public should not, because that would lead to “unintended consequences.”
“I would be careful about the unintended consequences of starting to blast too much of this out in the general public,” he said.
In a fitting description of fractional reserve banking, another SRAC member lamented that although institutions don’t want to see a “huge run” on their deposits, they likely will soon, which will bring about the need to impose bail-ins.
“People need to understand they can get bailed in, but you don’t want a huge run on the institutions. But there are going to be. And it could be an early warning signal to the FDIC and primary regulators when these things happen,” he said.
Unlike bail-outs, which involve a third party like taxpayers and governments rescuing failed financial institutions, bail-ins are a mechanism in which creditors of a failing financial institution are required to cancel some of its debts as part of a plan to save it from collapse.
One FDIC member claimed this economic “period of peacetime” will soon “flip faster than we saw in 2008.”
“I do think it’s hard to get a lot of demand for transparency right now, in this sort of period of peacetime, but that is going to flip and it’s going to flip faster than we saw in 2008,” he said.
Because of that, he said, it’s necessary for financial institutions to quickly leverage “the social media world” with curated talking points to combat “disinformation” and “avoid rumors taking over the narrative.”
Keep in mind, the FDIC insures $9 TRILLION of bank deposits with only $125 billion worth of assets.
In other words, only 1.3% of its holdings are in reserve.
It can’t possibly insure everybody, especially in a crisis when many people want to withdraw their money all at once.
Therefore, Federal Reserve-orchestrated bail-outs – and thus more inflation – are inevitable should a market crash come to pass.
Watch the full FDIC meeting:
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