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  1. -With London and the Bank of England at
    the center of the planning, new “financial reform regulations”
    have been put forward on a global basis by the Bank for
    International Settlements and the IMF, and simultaneously in
    various nations — including the wretched bag of loopholes called
    the Dodd-Frank bill in the United States.
    From review of these self-advertised “new financial regimes”
    coming out of London, which are claimed to “prevent the next
    crash,” EIR News Service has discovered that {all} of them claim
    to offer a way, at last, to “resolve,” or close down, big banks
    which have been bailed out as “too big to fail” up to now.
    But all have the same deadly character flaw. In splitting up
    the rotten bank (and that has meant nearly all the biggest U.S.-,
    UK-, and Europe-based banks since the crash accelerated in late
    2007) into two huge piles of assets — one to be protected by
    government as “systemic,” and the other to be sold off,
    liquidated, written off — all of these pieces of legislation
    provide for financial derivatives contracts to go into the
    “protected” pile. Protected as in “settlement paid for” by
    central bank money-printing and taxpayer bailouts. For the United
    States, if Dodd-Frank were to become law with its supposed
    Orderly Liquidation Authority for big banks under the FDIC, the
    technical term for the up to $250 trillion in derivatives is
    “Qualified Financial Contracts (QFC).” They would, according to
    recent speeches on the subject by Federal Reserve officials, be
    protected — and so would the collateral securities associated
    with the derivatives contracts. This is explicitly true of the
    BIS- and IMF- recommended outlines for new financial regulations;
    of the British Special Resolution Regime; and likely of the
    proposed new German law.
    These “new financial regulations,” despite what they claim,
    make {the derivatives bubble too big to fail}, as well as the
    biggest banks.
    In this, they grossly violate the principle and the letter
    of Glass-Steagall, which allows Federal protection and insurance
    only of regulated depository commercial banking activity.
    And as Lyndon LaRouche has insisted for more than 15 years,
    protecting and bailing out the quadrillion-dollar derivatives
    bubble is completely impossible, and will complete the
    economic destruction of any sovereign nation which attempts it.
    Some central bank officials who are on the record as against “too
    big to fail” insist that derivatives must have a “loophole.” This
    is like a river dam with just one loophole — it only lets water
    through.
    LaRouche says: “These people don’t get the principle. And it
    we don’t force through the principle, then we lose civilization.
    And remember: the British threatened the U.S. government
    directly, on this issue of Glass-Steagall vs. financial
    derivatives. Lose the derivatives, or lose civilization.” [pbg]

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