banks in strife the truth shall set you free, page-3

longhair

The Ozzie banks increased their leverage because the Hawkeating govt changed the banking rules (under Basle) and allowed overseas banks into Australia. These banks used greater levels of leverage. The overseas banks and financial institutions (such as General Electric - GE) have no concern about the welfare of Australians and where happy to massively increase lending.

Libs simply kept the banking arrangements that Labor had introduced. You can blame Libs for other matters but the excessive credit creation is part of the funny money system so beloved by socialists. Also the Libs ran surpluses so that is also a constraint on credit creation. Perhaps the RBA should have increased interest rates earlier and the govt should not have such an expansionist population transfer program (which causes increased demand).

I blame Hawkeating for the banking mess, because the local banks had to follow what the overseas banks were doing or lose business.

loki