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Bank of England announces it will keep the names of non-bank financial institutions it bails out a secret



On Monday, the Bank of England announced it will hide the identities of any pension funds, insurers or hedge funds bailed out to avoid the stigma.  This new policy of secrecy to protect banks’ identity will begin in 2025 when the central bank launches its Contingent NBFI Repo Facility.


Also in 2025, the final parts of Basel III will be implemented.  Basel III introduces bail-ins, where account holders rather than the government bail out a failing bank.


But that’s not all. In the “second half of this decade,” i.e. any time from 2025, is “the earliest” the Bank of England would issue a central bank digital currency.


In the past, wars and oil embargoes have been used to justify implementing new global financial systems.  Could we be seeing signs they are preparing for a crisis that they won’t let go to waste?


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1944 Bretton Woods


In 2016, Michael Rivero published an article that set out the history of the last 260 years showing the effects of efforts by private bankers to impose their system of slavery on the world.  The Federal Reserve Act forced that system on the American people while the post-WWII Bretton Woods agreement forced it onto the rest of the world.


In July 1944, towards the end of World War II, when it became obvious that the allies were going to win and dictate the post-war environment, the major world economic powers met at Bretton Woods and hammered out the Bretton Woods agreement for international finance. The British Pound lost its position as the global trade and reserve currency to the US dollar (part of the price demanded by Roosevelt in exchange for the US entry into the war).  Absent the economic advantages of being the world’s “go-to” currency, Britain was forced to nationalise the Bank of England in 1946.


The Bretton Woods international monetary system was established by delegates from 44 nations at the United Nations Monetary and Financial Conference in Bretton Woods, New Hampshire. It established a system of fixed currency exchange rate using gold as the universal standard.


The agreement also facilitated the creation of the International Monetary Fund (“IMF”) and the International Bank for Reconstruction and Development, which is known today as the World Bank.



According to Investopedia, the Bretton Woods system of fixed currency exchange rates tied to gold through the US dollar collapsed in 1971. It was formally ended in 1973.


1973 Oil Crisis and the Petrodollar


At the same time as the 1973 oil crisis, also known as the Arab oil embargo, the world economy was in recession.  The 1973 oil crisis was caused by an embargo by Arab oil-producing nations in response to US support for Israel during the Yom Kippur War.  The Organisation of the Petroleum Exporting Countries (“OPEC”) approved the embargo on 19 October 1973.


The OPEC oil embargo quadrupled the price of oil in six months. Prices remained high even after the embargo ended. The embargo also resulted in significant attitude and policy changes.  In his book, ‘Confessions of an Economic Hitman‘, John Perkins mentioned the aftereffects of the embargo:

There seemed little doubt that the 1973 oil embargo – which had initially appeared to be so negative – would end up offering many unexpected gifts to the engineering and construction business, and would help to further pave the road to a global empire.Confessions of an Economic Hitman, John Perkins, 2004

Five months before the 1973 oil crisis, the embargo and subsequent events were discussed with surprising accuracy at the twenty-second Bilderberg Meeting held in Saltsjiibaden, Sweden.  After discussing the two papers on the agenda, the meeting had a general discussion. 


In the minutes of the Bilderberg conference, participants are named at the beginning but not in the body of the text of the minutes. The minutes of the general discussion quoted a “German speaker”:

As big as the monetary impact of the oil situation might become in the future, it would be “only a little addition – not much more than a tenth – to the deep mess which we are in already,” according to a German speaker. [pg. 65]
Unless confidence in the dollar returned, world monetary reform would be just “an abstract academic exercise.” America’s friends would help her, but first she had to set her strategy. Eventually we should work toward an international federal reserve system which could impose rules on foreign currency accounts. If the Euro-markets had been subject to regulation in the way that national banking systems were, things would not have gotten out of hand as they had done. It was important to recognise that the oil money question was merely a part of this much larger framework. [pg. 66]Bilderberg Meetings, Saltsjiibaden Conference, 11-13 May 1973

Following the 1973 oil embargo, the petrodollar emerged as the primary medium of exchange for international oil transactions as a result of a series of agreements between the United States and oil-producing countries, particularly Saudi Arabia.


These agreements saw oil being priced in US dollars, making the dollar the de facto global currency for oil trade. Saudi Arabia agreed to sell its oil exclusively in US dollars, ensuring a steady demand for dollars and reinforcing the dollar’s status as a reserve currency. And oil-producing countries, including OPEC members, would recycle their petrodollar surpluses by investing in US Treasury bonds, financing US government deficits and supporting the US economy.


In the 1990s-2000s, as oil prices rose, oil-producing countries began to diversify their investments, reducing their reliance on US assets. The petrodollar’s influence began to wane.


Today, the petrodollar’s significance has diminished further, as oil-producing countries have increased their use of local currencies and alternative reserve currencies, such as the euro and Chinese yuan. The rise of alternative payment systems and digital currencies has also eroded the petrodollar’s dominance.


Further reading:



2008 Global Financial Crisis


In 2016, Mark Arnold found evidence that the 2008 financial crisis, widely referred to as The Great Recession, was not caused by banks acting recklessly.  Rather, it was set up by the Bank for International Settlements (“BIS”) imposing an accounting policy on US commercial banks only months before.


Mark-to-market is an accounting technique used to reflect the current market value of a company’s assets, liabilities and equity on a daily basis.  The accounting method values assets and liabilities on a bank’s balance sheet at “fair value,” their current market price, which is determined by market forces, such as supply and demand. It requires daily revaluation of assets and liabilities to reflect changes in market prices.  Market prices reflect the price that would be received to sell the asset or paid to transfer the liability in an orderly transaction between market participants.


It differs significantly from the transactional value method which shows assets and liabilities at cost on the balance sheet.


The mark-to-market method doesn’t come without its challenges. Mark-to-market models can be subject to errors and biases, which can impact the accuracy of valuations; in illiquid markets, it may be difficult to determine a fair value; and, can be complex and require significant resources and expertise, particularly for companies with large and diverse portfolios.


More importantly, because it is merely an accounting principle, in times when markets are volatile, this can significantly impact the appearance of liquidity of a bank while not being the case in reality.


In an introductory article to his six-part series ‘Hitler’s Bank: The Unknown Story Of The Bank For International Settlements’, Arnold explained what happened in 2008:

[The mark-to-market] principle played a devastating role in the [2008 financial] crisis because in implementing it banks were forced to mark their portfolios of mortgage-backed securities to the market for those securities, rather than to their face value or any other value; and the market at the time, as we all know, was collapsing.
In many instances, the underlying mortgages backing the securities were still sound and had not defaulted, yet the bank was still forced to “mark the value to the market.” The result was crashing balance sheets and capital reserves which made it impossible for banks to loan money, which in turn caused the credit crunch we all experienced.

Effectively, according to Arnold, what happened in 2008 was, along with laws that were passed or repealed by the US Congress to de-regulate investment banking, the BIS changed the accounting rules for banks which gave the appearance that they did not have sufficient assets to cover their liabilities and so caused a “credit crunch” – problem, reaction, solution.


The 2008 financial crisis led to the development and implementation of the BIS’s Basel III standards.


2025 Bank of England Tool


On Monday, Bloomberg reported that the Bank of England (“BoE”) will keep hidden the identities of pension funds, insurers, and liability-driven investment funds that use its new Contingent NBFI Repo Facility (“CNRF”) to prevent stigma attached to bail-outs. NFBI stands for “non-bank financial institution.” A repo facility, also known as a repurchase agreement facility, is a type of short-term borrowing mechanism used by central banks, governments, and financial institutions to manage liquidity and stabilise financial markets.


The CNRF is a tool designed to operate as a backstop to the gilt market (UK government bonds market), which is crucial to UK financial markets, and will be activated during times of extreme stress when gilt market dysfunction threatens financial stability.  The facility will allow users to place collateral, such as gilts, with the BoE in exchange for cash, with a “haircut” on the collateral to protect the central bank against losses.


Deputy Governor Dave Ramsden stated that the decision to create the CNRF reflects changes in the structure of financial markets since the 2008 financial crisis.  The development of the CNRF tool is a recognition of the changed financial risks, and the decision to keep identities secret reflects lessons from the financial crisis when stigma prevented banks from using standard BoE liquidity facilities.


The BoE has delayed the launch of the CNRF until the start of 2025, but the necessary systems changes are in place and the facility may potentially be extended to hedge funds in the future.


Bloomberg was reporting on a speech delivered by Ramsden at an Official Monetary and Financial Institutions Forum (“OMFIF”) event.


His speech highlighted the continued shift in activity to non-banks and considered how the Bank’s (BoE’s) balance sheet can be used to support the evolving financial system.


One of the pieces of evidence that there is a new tendency to volatility in financial markets and the wider financial system, Ramsden said, is that “developments in technology alongside greater market concentration and inter-connectedness mean we are more likely to see large swings in prices, particularly intraday, as markets can react faster to information and are more prone to herding behaviour.”


“Is that new volatility a sign of increasing financial instability? No, it is not,” he said. “Market volatility does not equate to financial instability, but we have to monitor and act on those developments appropriately, at the firm level, system-wide level and, importantly, in the operation of the Bank’s balance sheet.”

Today, I want to reflect on what we’ve seen in 2024, with its lack of significant dysfunction but continued volatility … I will then set out how we are utilising the Bank’s balance sheet to support financial stability.
Ensuring the Bank’s balance sheet can support financial stability
The Bank’s balance sheet operations, at their core, provide liquidity to the financial system when liquidity is required.
Until now, the Bank has provided liquidity to the financial system as a whole via the banking system, under the assumption that banks would onward lend and that liquidity would eventually find its way to the part of the financial system where it was most needed. But when core financial markets are severely dysfunctional, as in 2020 or as in the SWES exercise, we have seen that banks are not always willing or able to pass on sufficient liquidity sufficiently quickly to NBFIs to meet their demand and avoid a period of financial instability.
Accordingly, we have been working to develop tools to lend to NBFIs directly in times of severe dysfunction in core UK financial markets when financial stability is under threat.  As a first step in this work the Bank announced in the summer that it is developing the Contingent NBFI Repo Facility (CNRF).
We understand from our market engagement that our approach to disclosure is a particular point of interest, and that contacts expressed concerns that revealing too much information could create stigma around the use of the CNRF. It’s incredibly important to the Bank that we avoid this.
The design and inherent nature of the CNRF should help avoid stigma … To further mitigate the risk of stigma, the Bank intends to publish the number of firms that are signed up to the CNRF, but we would not reveal any names; and in the event that we activate the CNRF, we would only disclose borrowing at an aggregate level.

Stigma?  What stigma?  Would that be the stigma that the public will know how much the BoE is bailing out individual non-banking institutions and so be subject to public scrutiny, however limited that might already be?


Additionally, considering the history of using crises such as wars and oil embargoes to change the global monetary system, what do you think they know but aren’t telling us?


2025 CDBCs and Bail-Ins


Coincidentally, two major shifts in the global monetary system are planned for next year: central bank digital currencies (“CBDCs”) and the final implementation of Basel III standards.


Earlier this year, Brandon Smith author at Alt-Market wrote:

I suspect the time is coming soon for the US and it may be in the form of a brand-new Bretton Woods-like system that removes the dollar as world reserve and replaces it with a new digital basket structure. Global banks are essentially admitting to the plan for a complete overhaul of the dollar-based financial world and the creation of a CBDC-centric system built on “unified ledgers.”

On its website, the BoE says, “We haven’t made a decision on whether we will introduce a digital pound [a CBDC]. The earliest we would issue a digital pound would be the second half of this decade.” 


The second half of this decade begins next year, 2025.  Concurrently, Basel III is being implemented in the UK.  A press release from BIS in October announced that “members unanimously reaffirmed their expectation of implementing all aspects of the Basel III framework in full, consistently and as soon as possible.”


Basel III introduces bail-ins.  Bail-ins and bailouts are designed to prevent the complete collapse of a failing bank. The difference between the two lies primarily in who bears the financial burden of rescuing the bank.


In a bailout, the government injects capital into banks, enabling them to continue their operations.  We saw this happen after the 2007-2008 financial crisis.


With bail-ins banks use the money from depositors and unsecured creditors to help them avoid failure.  Depositors, the bank’s customers, include you, me and anyone who has money in a bank account.



Since 2018, the UK has been implementing Basel III.  While some aspects of Basel III have already been implemented, the UK’s implementation is ongoing.  The next milestone is 1 January 2025, when the Basel 3.1 framework will be introduced in the UK. 


Basel 3.1 is the name given to the parts of the Basel III standards that remain to be implemented in the UK.  This final package of Basel III standards to be implemented was referred to as “Basel 3.1 standards” in a consultation paper issued by the Prudential Regulation Authority in November 2022.  Basel 3.1 mainly addresses the measurement of Risk Weighted Assets (“RWAs”).


RWAs are a bank’s assets or off-balance-sheet exposures, weighted according to their risk. They are calculated by multiplying the value of each asset by its respective risk weight.  This calculation is used to determine the minimum amount of capital a financial institution must hold. The more risk a bank takes, the more capital is needed to protect depositors.


That may well be all well and good.  But with the introduction of bail-ins, the banks’ customers are being anything but protected, especially if we consider that BIS accounting rules played a significant role in setting up the 2008 financial crisis, for which the public paid dearly. Could the plan be to crash the banks with accounting rules, instigate a bail-in and then offer the banks’ customers CBDCs for their lost deposits; one digital pound for each pound on deposit?  It would force sufficient numbers onto a CBDC system, enough to make the remainder adopt them, whether they liked it or not.


For non-bank financial institutions, the intention to hide the names of which institutions are being bailed out, and by how much, by the BoE seems, again, to be a measure to protect financial institutions, not depositors or investors.  Decisions being made behind closed doors and then the effects of those decisions being kept secret is never a good sign.  What are they up to?


Further reading:


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