Get Your Money Out of the Bank

BRITAIN: YOU NO LONGER CONTROL YOUR OWN MONEY

A UK father tried to withdraw £2,500 of his own money to buy a motorbike for his son.

The bank’s response?

“You’ll need to prove how you’re going to spend it.”

Access denied — with no legal wrongdoing.

When… pic.twitter.com/sCF3qWmECY

— Jim Ferguson (@JimFergusonUK) March 25, 2025

I once was asked at my bank why I was withdrawing some money. I did answer but that was the only time I was asked. In the US, deposits are not your money: the bank can literally take it to pay off debt as a bail-in. While there are certain conditions, it is possible. As Grok pointed out to me, it is unlikely. At which point I reminded it of how Obama treated preferred bond holders of GM stock.

from Grok:

Summary

• Did Obama Supersede the Payment Hierarchy?
  • Unsecured Bondholders: Yes, in effect, though not directly. The Obama administration’s restructuring plan, backed by $49.5 billion in TARP funds, gave unsecured bondholders a 10% equity stake in New GM, while the UAW (a lower-priority claimant) received a 39% stake. This deviated from the absolute priority rule, as bondholders should have been paid in full before the UAW received anything. However, the plan was legally approved by the bankruptcy court under a Section 363 sale, which allows for such deviations if deemed in the best interest of the estate. The government’s leverage and the court’s approval enabled this outcome, effectively bypassing the standard hierarchy.
  • Preferred Shareholders: No. Preferred shareholders were wiped out, which aligns with the bankruptcy hierarchy. They are equity investors, below all creditors, and typically receive nothing in a Chapter 11 reorganization of an insolvent company like GM.
• Legal vs. Political: While the restructuring was legally permissible under the Bankruptcy Code (via Section 363 and court approval), the Obama administration’s influence effectively altered the payment hierarchy for unsecured bondholders, prioritizing political and economic goals (e.g., saving jobs, ensuring GM’s survival) over strict adherence to legal priority.
• Implications: The GM bankruptcy highlighted the tension between legal principles and government intervention in times of crisis. Bondholders felt their rights were bypassed, but the government argued that the restructuring was necessary to save GM and the broader economy.