Comments on David Llewellyn-Smith “THE DISTILLERY: Wholesale destruction”, 8/02/2010, http://www.businessspectator.com.au/bs.nsf/Article/THE-DISTILLERY-Recipe-for-Depression-pd20100208-2FSS7?OpenDocument&src=sph
When David Llewellyn-Smith argues that "It would have been the Bank of China, or some other state-owned enterprise; one that had not over-indulged in the preceding free-market driven shadow banking mania." he is kidding himself and the readers.
Where do you think the Australian government would have done to the four pillars or some even say six pillars policy, even if someone were so silly to suggest a takeover by Chinese banks? Do you think the banks were not as strategic to Australia as to some of the smaller investments in the resource sector by Chinese last year?
David Llewellyn-Smith is questioning others' analysis, where is your analysis?
Very interesting “media watch” by David Llewellyn-Smith! Perhaps it is time for David Llewellyn-Smith to watch his own side.
It is a typical double standard!
Showing posts with label bank guarantee. Show all posts
Showing posts with label bank guarantee. Show all posts
2009-09-27
Why should Aussie banks funding costs be high?
Comments on Bill Evens “WEEKEND ECONOMIST: Clean bill of health?”, 26/09/2009, http://www.businessspectator.com.au/bs.nsf/Article/WEEKEND-ECONOMIST-Clean-bill-of-health-pd20090925-W8AWY?OpenDocument
One point that I find it hard to understand is that why the wide funding spreads in the global markets should have such a strong hold on Australian banks, given the government guarantee and the ability of Australian banks to raise capital fairly easily.
Bill, can you shed some light on that?
On official interest rate, it may be prudent for RBA to raise it symbolically once fairly early to send a signal to prevent unnecessary bubbles in some areas.
However, ultimately, it is preferable to have low interest rates and reducing the government fiscal stimulus to have the economy more efficient. The government has an unfair advantage in competing with the private sector by forcing the interest rate up or force the hand of the RBA in keeping the rate low for a longer time.
One point that I find it hard to understand is that why the wide funding spreads in the global markets should have such a strong hold on Australian banks, given the government guarantee and the ability of Australian banks to raise capital fairly easily.
Bill, can you shed some light on that?
On official interest rate, it may be prudent for RBA to raise it symbolically once fairly early to send a signal to prevent unnecessary bubbles in some areas.
However, ultimately, it is preferable to have low interest rates and reducing the government fiscal stimulus to have the economy more efficient. The government has an unfair advantage in competing with the private sector by forcing the interest rate up or force the hand of the RBA in keeping the rate low for a longer time.
2009-08-04
Let Australian banks compete with other banks on their own feet
Comments on Michael Stutchbury “Bank props must go”, 4/08/2009, http://blogs.theaustralian.news.com.au/currentaccount/index.php/theaustralian/comments/bank_props_must_go/
Stutchbury is absolutely right in that the bank guarantees should go as the danger of the global financial crisis is passing and over.
Australian banks have been the safest and most resilient among the world in the financial crisis. They are very profitable. There is no need for continued government guarantee. They should be able to stand on their own feet and compete with any banks.
Unnecessary government supports will distort the market and the price signals, hence alter the behaviours of private businesses. Further, there is no need to put taxpayers at unnecessary risk for the profit of private businesses.
Stutchbury is absolutely right in that the bank guarantees should go as the danger of the global financial crisis is passing and over.
Australian banks have been the safest and most resilient among the world in the financial crisis. They are very profitable. There is no need for continued government guarantee. They should be able to stand on their own feet and compete with any banks.
Unnecessary government supports will distort the market and the price signals, hence alter the behaviours of private businesses. Further, there is no need to put taxpayers at unnecessary risk for the profit of private businesses.
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