Interesting choice of words:
[Australian Prudential Regulation Authority chairman John Laker] said the Australian banking system was more sound than it was five or six years ago.
“We know that because we managed to negotiate the financial crisis without the fallout for our financial systems,” he said.
“The banking sector is holding more capital, it’s holding higher quality capital, it is holding more liquid assets.”
What he did not say is that Australian banks are financially sound and holding enough capital — and we are unlikely to hear that before banks double their current “improved” capital and leverage ratios.
Read more at Housing bubble worries 'alarmist': RBA | Business Spectator.
Hmm…I don’t pretend to understand the banking system, but I do know that it is delusionary to claim to have a good system based on one good outcome.
If I may paraphrase Mr Laker’s words…
“[He] said the land-mine avoidance system was more sound than it was five or six years ago. We know that because we managed to walk through a minefield without being blown up.”
Nassim Taleb warns us to beware of low-probability-high-impact events.
Because the village has lived peacefully next to the smoking volcano for the last 100 years doesn’t mean that it is no longer a threat.
All lies! When are any of these people going to tell us about the secret bail-in legislation being worked on? That which is requested by BIS, FSB and others. RBA, APRA, Rudd, Abbott and colluding others are all working on it now. So when the big four Aussie banks’ escalating derivatives turn the wrong way, it will be these institutions that are too big to have egg on their face and our banks which will be too big to fail (TBTF). Then depositors’ funds, your/our money which will be raided as done in Cyprus by the bail-in.
Stand up and call for a Glass-Steagall like separation of classic banking required to run the country and growth from the toxic investment and speculative banking high on derivatives and likely to bring us all down like a house of cards which only feeds the greedy few!
CBA, why are you hiding the value of your derivatives since 2012? What is it that you have to hide? Perhaps it’s that the ratio is so ludicrously out of whack anyone who saw it would be in an uproar against it!
All will be found out soon when the cards lay flat and motionless on the floor. The global ground swell is coming.