December 17, 2022 / VOLUME NO. 240

Bearer Bonds Die Hard

‘Tis the season for a long-running seasonal debate: Is “Die Hard” a Christmas movie?

The 1988 heist action movie is about a German national named Hans Gruber, played by Alan Rickman, who takes the Nakatomi Corp.’s company holiday party hostage. Hero John McClane, played by Bruce Willis, must take down Gruber and his henchmen to save the day and reunite with his estranged wife.

The debate about the movie being a Christmas film centers around the fact that the movie takes place on Dec. 24 — for some fervent fans who watch this movie every year, that’s enough. But if “Die Hard” is a Christmas movie, it’s also a movie about financial instruments. 

Remember, Gruber takes the Nakatomi holiday party hostage because he’s trying to break into the company vault to steal $640 million in bearer bonds. A bearer bond is an unregistered debt security where the payor of the debt is known but the recipient of the interest is not. 

“Bearer bonds, as the name implies, are the property of the holder. Because the issuer maintains no records of ownership, the investor is paid only after physically presenting a bond or a bond interest coupon,” according to a 1984 article from The New York Times.

These bonds could be useful to shield an investors’ identity, but it could be difficult to prove loss, theft or destruction. If Gruber steals the pile of Nakatomi’s bearer bonds, they’re his. If they’re destroyed in a dramatic scene, then no one gets to redeem the bonds.

I’m explaining this because those bonds are antiquated. The Times wrote in 1984 that they were already a “disappearing breed.” Companies must register their bonds and securities, and the U.S. Securities and Exchange Commission has been active in determining new products that could qualify as securities. Financial assets and instruments come with a chain of custody and ownership; we’ve moved away from bearer bonds to blockchains.

I don’t know where financial innovation or regulation will go next year; I don’t know what the hot new products and services will be. But thanks to “Die Hard,” an action movie about obscure financial instruments, I know how far we’ve come.

Kiah Lau Haslett, managing editor for Bank Director

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