Winner Takes All: The Super-priority Status of Derivatives

Cyprus-style confiscation of depositor funds has been called the "new normal." Bail-in policies are appearing in multiple countries directing failing TBTF banks to convert the funds of "unsecured creditors" into capital, including depositors. Even state and local governments deposits may be at risk. Derivatives have "super-priority" status in bankruptcy,and Dodd Frank precludes further taxpayer bailouts.