We have a serious problem here. Depositors in a bank are NOT risking their money as an investor in a hedge fund. They expect honesty and stability. If the bank is trading and doubles its money, it belongs to the shareholders – not the depositors. Likewise, a loss belongs to the shareholders and that means 100% of all deposits MUST be covered – PERIOD!
Even Senator Lankford fails to understand that simply because a Chinese national is a depositor it does NOT justify defaulting on them. That would mean that all foreigners should remove their money from the United States. It would also be against the Constitution. When this nation was formed, we adopted TERRITORIAL JURISDICTION and rejected the monarchy system of jurisdiction. If you killed someone in Paris but you were British, the French would arrest you and could not charge or punish you because you were the “property” of the King of England. They would send you back to your king and explain what you did and it was up to your king to determine what to do.
We adopted TERRITORIAL JURISDICTION whereas if you were British but killed an American, you stood trial in America and they rejected the idea that you were the property of the King of England. ALL depositors, regardless of their origin, MUST be treated the same as any citizen. You cannot have it both ways. So, sorry. Senator Lankford, you are wrong. We MUST cover even a deposit by Putin or the Communist Party of China. Otherwise, ALL foreign investors should also sell ALL their holdings of US debt – PERIOD!
Yellen has cast doubt on this policy and it is a warning that all banks have this same crisis in the collapse of long-term debt because of this endless pit into which we are throwing money called Ukraine. We stand NOTHING to gain from this insanity. It is nothing more than the personal vindictiveness of the Neocons who have transformed Ukraine into an Anti-Russia spearhead and American foreign policy into the aggressor in the quest for World War III. All Neocons should be arrested for treason. Only Congress can declare war. This is a proxy war that has not been declared and has no benefit to the American people or even the Ukrainian people who have been forced to flee their homes in this battle to conquer Russia.