nab's use of taf from the us fed during gfc

In part from Today's Morning Money


Again, here are the questions we sent them:

"Please can you advise on what date the bank informed APRA, RBA and ASX about NAB's use of the Term Auction Facility (TAF) from the US Federal Reserve?

"And why this information was not made public at the time?"

The questions were fairly clear.

Here's the reply we received from an NAB spokesperson:

"During the GFC, NAB worked to ensure its balance sheet maintained a bias towards safety during what was a difficult market. Participating in the TAF was a cost effective way to raise funds. NAB accessed the TAF through our New York operations, and was encouraged to do so by the US Reserve, as a way to encourage term liquidity moving in the market. In the context of the bank's overall funding requirements the amount was not material. Our regulators had a clear understanding of our overall funding and liquidity position."

Oh how we hate the term "GFC". We've vowed never to use it in Money Morning unless we're quoting someone.

We don't know why we hate it. But it grates.

However, we weren't entirely happy with NAB's answer. So quick-as-a-flash we fired back another email. We asked:

"Thanks. Which regulators?"

Almost as quickly, the NAB spokesperson replied:

"As you would expect, as part of our usual course of business, we provide updates to our regulators on the state of our overall funding and liquidity position."

Still unhappy with the answer we fired back another email:

"Which regulators... APRA, RBA or ASX?"

The reply came... not so quickly though this time:

"During the crisis, we kept our responsible prudential regulator APRA informed. However, we obviously kept regulators such as the RBA and ASIC updated on issues such as our funding and liquidity position during this time. The ASX was kept up to date, through normal processes, such as Trading Updates and half and full year results."

Still doesn't answer the question though does it? It's still an ambiguous reply... it called for another email from your editor:

"But did you specifically inform APRA, the RBA and ASX about the loans from the US Federal Reserve?"

Surprisingly the spokesperson replied:

"Specifically, we kept APRA (our responsible prudential regulator) informed."

But we still weren't happy:

"Are you saying you informed ASX and RBA about the Fed loans?" we asked.

The obvious answer to that is no. Which was confirmed in the final reply. Playing with a straighter bat than the Aussie cricket team, NAB replied:

"The participation in TAF was not material. However, regulators were aware of our overall liquidity and funding position as required. I can't provide any further comment on the matter."

Goodness me, why can't these people just answer a question right away.



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