WBC (ASX) Westpac's $1,000,000,000 AUSTRAC Settlement?

Originally posted by pe981: ↑

I wrote this Post #: 67638936 on 6/5/23 which included some commentary and references in regard to what really happened during the GFC as I was sick of the myths pedaled by some on here. Unfortunately tweedle dee and tweedle dum continue to congratulate each other on spreading misinformation and living in some sort of deluded past.
For ease I have copied the section on the GFC below:-
Now, if you bear with me, I would also like to make a comment on what happened in the GFC.
The rhetoric is often that our banks were bailed out by billions of taxpayers funds however this is simply not true and ignores the global circumstances of the GFC.
Worth reading the facts on what caused the GFC on the RBA site - https://www.rba.gov.au/education/resources/explainers/the-global-financial-crisis.html
In essence it was brought on by practises in America which we had little exposure to.
In fact our major banks were in a strong position although our smaller banks did not have the same quality on their books.
The result of the problems in the US of course spread worldwide which impacted global liquidity including the shut down of capital markets and this was the main problem facing Australian banks.
There was an article written in the AFR in 2018 where they spoke to members of the RBA in regard to what really went on which gives great insight. I cannot link the article to HC due to copyright however if you google - afr article how rba helped the banks during gfc it is easily found and worth reading.
Essentially the RBA stepped in very early on to fund the shortfall in liquidity and the reason they could do this was the very strong Mortgage backed securities the banks could offer as collateral. Our smaller banks did it much tougher early on with much lower quality securities. (It is noted that the banks salvation lay in liquidity provided by the RBA rather than anything APRA did or had done.)
As the GFC unfolded governments around the world stepped in to assist the banking sector and the Aus Government at the time followed by guaranteeing deposits to avoid a run on the banks through fear. This guarantee had to be paid for over a certain dollar amount.
The Rudd government then announced that the banks wholesale funding would be guaranteed so they could take advantage of the countries triple A rating and this allowed the banks to go back to the market for capital which of course they did with gusto. It should be mentioned that this guarantee came at a cost depending on what credit rating the bank had and a very pertinent comment in that article was:-
"What's more, no claims were ever made against the Australian government, and the fees charged generated $4.5 billion of revenue."
So while it is fair to say that the GFC created problems we did not experience the problems other countries had in what was a global contagion and our major banks remained strong without the Government throwing actual funds at them!
APRA has continued to increase regulation and capital requirements and the balance sheets of our banks are very strong.
This of course does not make for the sexy growth stories on the ASX and doesn't suit all investors obviously, but they remain a significant part of our overall market.
Long term hold usually is fine if you have bought wisely and dividend returns have been good, although in NAB's case I am pleased they are sticking to a much more conservative payout ratio than they used to............
Anyway, none of the above should be taken as advice to buy any bank and I often agree with many in regard to overpaid and underperforming executives. I am just trying to throw some info out there to address some of the constant rhetoric which seems to have become revisionist history no doubt to be poo pooed by some.......................

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Thanks pe981 for a rational and informed post.

So clearly no bailout.

I'm out of this conversation, you can't argue with people who are too thick or won't let themselves understand.

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Last updated 15.59pm 02/05/2024 ?

Thanks pe981 for a rational and informed post.So clearly no...

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