Banks at a Crossroads Is Your Money Truly Secure -3

4.) BANK DEPOSIT INSURANCE “DIF”: - A deposit insurance fund “DIF” is a financial mechanism established by governments to protect depositors in case a bank fails. It provides insurance coverage to depositors up to a certain limit, ensuring that their funds are safe even if a bank becomes insolvent. Its main purpose is to maintain public confidence in the banking system and prevent financial instability. We are at the current level of $116 billion dollars of “DIF” to cover $17 trillion dollars of total bank deposits with $10.45 trillion being insured. That is only 1.11% of all insured bank deposits being insured!! There is no insurance!!! What happens if your bank becomes insolvent? Such a disaster would trigger orderly liquidation authority protocols. In short, a “bail-in.” 1. The bank is in default, or in danger of default. A bank is in danger of default when it is likely to file for bankruptcy, has debt that will deplete all or most of its capital, has greater debts than assets, or will likely be unable to pay its debts in the normal course of business. 2. The bank represents a systemic risk to the banking sector. The likelihood of systemic risk is based on the negative effect of default on financial stability; low income, minority, or underserved communities; and on creditors, shareholders, and counter-parties. Forget bailouts. Here’s how a bank “bail-in” works https://fortune.com/recommends/banking/what-is-a-bail-in/