Comments on: Why No Australian Banks Have Failed

By: Sean Carmody

Sean Carmody — Thu, 18 Jun 2009 12:22:23 +0000

There is a big difference between directly injecting equity, which US and UK Governments have done, and providing a funding guarantee. While the guarantee does put a contingent liability on the taxpayer, the risk is lower than direct equity. Furthermore, the banks are paying for the privelege (0.70% per annum for the AA rated banks and more for lower rated banks). So, while the taxpayer is certainly shouldering risk, so far the only money that has flowed has been from the banks back to the Government. There’s no doubt that the Government actions have been a get out of jail free card for the likes of Suncorp and Macquarie, the majors would survived (not without some pain perhaps).

By: baz

baz — Thu, 11 Jun 2009 22:16:03 +0000

Great comment. Makes you wonder how the “Big 4″ would have shaped up without the taxpayer (I had no say in the matter!) guarantee.

By: Brett

Brett — Thu, 11 Jun 2009 10:33:38 +0000

Another point about the porky by Mr Smith. The Future Fund was slinging the banks heaps of cash last year, and I reckon that counts as our money! (If I recall correctly, it was Kierin Davies and Felicity Emmit? that unearthed that, but it never got wider coverage – as we all know, the MSM doesn’t have the time or editorial space to bore us Aussies with the facts )