dead man walking, page-27

Note to all re the "Ruddbank"

Some think it will have a total loan capacity of $4 bill. or thereabouts. That is the equity capital. Like any bank. But then it will borrow ten times that. Or more. I recall 5 bill. Funded by the govt and the big 4.

As a govt sponsored/backed bank it will have no trouble in getting deposits as it will be investment grade. Probably have an A or two in front of it. (I keep all the newspaper cuttings) It will charge interest like any other bank. It will hold take security, like any other bank.

That is, it will not be a minnow. It will attract a lot of scared money, that can be put back into the corporate/trust lending market, thus easing things a substantial degree. Future Fund likely big depositor?

Think it will be for Australian assets only, though. Anyone fill me in on this with some reliable information?

It is there to back up the local lenders to replace foreign banks who participated in syndicates can no longer lend at rollover time due in part at least to problems in their home turf.

This will very substantially reduce refinancing risk, which is the main source of fear for investors atm. It will not of course eliminate it.

Seems to this poster that if spread risk over a range of funds, the likelihood of a large percentage average profit in the survivors, looks close to 100% at current prices. That allows for some to fold.