Our Banks have been going to our Reserve Bank for capital for several weeks now.
Effectively the Taxpayers are now supporting their bad lending policies even now. Therefor our Banks are not as flash as they make out. They only operate with Reserve Bank support.
I prefer the British scheme where Banks needing funds, and are unable to obtain them from the markets or shareholders, issue preferential shares to the Government in return for capital. In this way the taxpayers have a say in how the funds are used and the Banks can not carry on with their reckless 100% home lending and bonuses.
I agree that guaranteeing Bank deposits is a necessary confidence measure, but I would be very interested to see how this will happen.
In the (unlikely) event that a Bank becomes insolvent, will the Government hand them Taxpayers funds for withdrawals and business as usual.
Surely there will be conditions. And the conditions must be of interest and understood.
