Nick, well expressed. However, one nagging thought persists....

Nick, well expressed. However, one nagging thought persists.

Stevens said explicitly that the RBA would not assist banks in recovery. Banks are commercial entities which exercise their individual strategies, it argued.

Yet using the guise of maintaining financial stability, the RBA has jumped into the cause by helping some banks.

You indicate that the factors affecting banks are outside of their control - thus the RBA intervention - but it could be argued that those factors are also affecting many other businesses.

Those other businesses affected have to work out their own recovery strategy.

But the RBA will look after the banks...? After having said almost categorically that it would not do so.

I know we could not allow a bank to go under. My point, I suppose, is to explore further your premise that the RBA was able to idealogically elevate illiquidity over insolvency, and provide support for the lesser of the two monetary hurdles.

This is remembering that a bank as a commercial entity has to make its own decisions.

What do you think, Nick?

Larry