pwinne, "aussie banks are some of the most robust in the world. the know more about 'risk' than you and I"
a) being the most robust in the world isn't much of a boast b) they are so robust that they all had their credit ratings downgraded last week c) everyone thought Lehman Bros were bullet proof. They weren't. Neither are our banks. Their risk is not stated in their balance sheets by Govt. decree. Their auditors are not allowed to express an opinion as to whether the banks' levels of credit risk are reasonable - again, because the Govt. prohibits it.
So yes, I do know more about bank risk than most bank employees, and that includes their quants. They have been a house of cards for at least a decade. When they collapse, who knows, but if they are to avoid it they have a lot of unwinding to do.
