Worked for Dept. Of Finance during the GFC. Defcon 1 is an...

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19/12/18

23:58

Post #: 36913174
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Originally posted by CaptainBarnacles: ↑

In the GFC - the banks weren't resilient at all. They were completely dependent on the gov bailing them out. Best case extremely dilutive cap raises were needed. And then the gov introduced those guarantees on savings deposits etc, and helped out with borrowing from OS. Also there were those shotgun marriages of St George and Bank West that were facilitated by the gov as well, to stop contagion. Also any property market contagion was seen as a possible disaster. And now everybody thinks that the banks could have stood alone and survived, which was just as impossible here as in the US without massive intervention.

I was working in the industry at that time! The industry was at Defcon 1. The only game in town was buttering up the gov and regulators. Macquarie had to raise variable home loan interest rates by about 5%, until the gov got involved, and was in real trouble as well.

Fortunately the banks are now in a better state to survive a financial crisis than they were a few years ago.

I suspect at today's AGM, the markets are trying to get a sense if capital management options are still on the table for the ANZ. I guess with New Zealand reserve requirements coming up, and the IOOF divestment unlikely (and the val worse than it was at that time), I suspect today's outlook outlook statement is saying no to Capital Management at this stage, not that anything has been promised.

All IMO

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Worked for Dept. Of Finance during the GFC. Defcon 1 is an understatement. The red button got pressed! Rudd and co ordered the liquidation of our SDR reserves mostly to China for USD. Half way through liquidating we got a magical figure from the ABS.... 0.1 The economy grew that magical quarter and not contracted! The estimate was around 4% contraction in a single quarter! The overnight swap transactions was 0 for 30 working days! It was no less than a miracle... The SDR liquidation stopped immediately.

The next step if it went ahead was dropping all that money on to the banking system to liquidate it. Rudd and co settled for ATO to pay anyone that paid tax the year before a stipend amount and a bunch of guarantees instead.

ANZ Price at posting: $23.94 Sentiment: Hold Disclosure: Not Held
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0 Great analysis

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