comment or facts from andrew bolts blogs this is the link http://blogs.news.com.au/heraldsun/andrewbolt/index.php/heraldsun/comments/a_man_told_a_man_who_told_rudd/ and the article
A man told a man who told Rudd 19 Comments | 0 Trackbacks | Permalink Andrew Bolt Blog Andrew Bolt Wednesday, October 22, 2008 at 05:55am
It’s not enough that the Rudd Government hands out $10.4 billion in pump priming without revealing a single forecast on which it based that decision.
Now it’s confirmed that it gave a dangerously flawed bank deposits guarantee without even speaking to the Reserve Bank governor - a detail it fudged when announcing the move:
THE Government has backflipped on its free unlimited bank deposit guarantee after it emerged Reserve Bank governor Glenn Stevens gave advice to impose a fee for large sums to avoid distortions to the financial markets....
Kevin Rudd yesterday revealed he had not consulted Mr Stevens before announcing the decision at the height of the global financial storm. The Prime Minister said that although he had not spoken about it to Mr Stevens the governor’s support had been communicated by Treasury secretary Ken Henry during a cabinet committee meeting…
On October 13, the day after the unlimited guarantee was announced, Mr Rudd told parliament the measure had been “recommended to the Government by the Australian regulators, the Reserve Bank, the Prudential Regulation Authority and the Treasurer.”
The Reserve discussed the guarantee with Treasury early last week when the Government was considering setting a threshold of $5 million, above which a fee would be charged for the government guarantee.
Mr Stevens wrote to Dr Henry last Friday saying this level was incredibly generous by the standards of other countries. He warned Treasury the sudden surge in demand for guaranteed instruments was creating “serious dislocation in the financial system”.
This is consulation by Chinese whispers, and confirms a bizarre turnaround for Kevin Rudd, the prime bureaucrat - a back-of-the-envelope approach to spending billions and guaranteeing even more.
Dennis Shanahan:
THE Rudd Government has made its first big mistake under pressure… For the Government, those “details” have led to a character change in its bank guarantee and a dangerous whiff of playing to publicity without due deference to the fundamentals.
Essentially, the Government rushed a decision on bank deposit guarantees after a weekend meeting of cabinet outbid Malcolm Turnbull’s suggestion of a $100,000 limited guarantee. It did so without full and direct exchanges with the Reserve Bank on the biggest banking decision of its life
