Take a bow, Mr Rudd. Take a bow, Mr Swan. You are responsible for the extraordinary out-of-cycle rate cut by the ANZ bank, and in more ways than the ANZ cares to acknowledge.
On Sunday after crisis talks with officials the Prime Minister announced that the Government would act as a guarantor for the overseas borrowings of Australian banks and other deposit-taking institutions.
Although the
A lot of it. I feel glad to live in Australia (after having had some doubts on Friday)
PRIME MINISTER - MEDIA RELEASE - GLOBAL FINANCIAL CRISIS - CANBERRA - 12 OCTOBER 2008
Global financial markets are experiencing some of the most challenging conditions ever witnessed.
In recent days, as global financial conditions have deteriorated markedly, governments around the world have taken
Another 100 points.
That's another complete percentage point. So says Macquarie's Rory Robertson:
"**Tuesday's 100bp cash-rate cut from 7% to 6% provided a win for pretty well everyone. Borrowers got a sizeable drop in borrowing rates (80bp off headline mortgage rates), lenders got additional support for their lending margins, and the RBA neatly side-stepped many of its critics by cutting rates
Iceland may be a barometer for what’s changing in the world economy. It was only very recently that the Milton Friedman fan club was hailing Iceland as a “Nordic Tiger”, lauding its flat taxes and praising its “economic freedom”. “Economic miracle” was a common phrase. Read more »
Had he gone ahead with his plan to legislate this week to guarantee only the first $20,000 of each bank deposit he could have sparked a run on the banks.
It's easy to see how.
When he said Friday the guarantee would protect up to 85% of depositors he was implicitly telling the other 15% they would be unprotected.
In order to get that protection a depositor with, say, $120,000 in an account
At Odd Numbers, Zubin Jelveh points out:
"It was little a little more than a year ago when the [spread between what the banks could get overnight with the Fed and what they then charged each other] blew open from its typical spread of 8 to 10 basis points to 100 basis points:
It was quite a dramatic jump which indicated that interbank lending was drying up, prompting the Fed and other
The Prime Minister has just announced legislation that will guarantee the first $20,000 of each individual bank deposit. Bloody hell!
What does that imply about the rest of each bank deposit? (One of my family's deposits is quite big at the moment.)
It was fine when there was no explicit guarantee of bank deposits - that mean that everyone was in the same boat. But not now. This wise thing
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