The biggest myth of Australian banking: how the government has allowed the industry to fail
Updated December 02, 2018 17:17:22The Federal Government has done nothing to stop Australia’s biggest banks from collapsing in a matter of weeks, according to the head of a national regulator.
Key points:Finance Minister Mathias Cormann said he will announce new measures to help the industry recover and he wants to “bring it back to life”Key pointsThe Government says it will help Australian banks recover and will “bring” them back to “life”The regulator said it would consider new measures in the wake of the events at A$100 billion-a-day bank collapse in the US in November, when A$2.3 billion of capital was wiped out.
Mr Cormann says the Government has failed to stop the banks collapsing, and will make “significant” changes in the coming weeks to help Australian financial services recover.
“It’s a significant problem, and I think we’ve got to deal with it,” he said.
“But it’s one of those things where, you know, it’s got to be dealt with.”
I’m going to make it clear to the Federal Government, I’m going a step further and I’m not going to stand by.
“What is the Aussie banking crisis?
The crisis began in mid-November when banks announced they were in deep trouble.
It spiralled into a crisis that saw hundreds of millions of dollars wiped out from the banking system.
The Australian Securities and Investments Commission (ASIC) said A$1.8 trillion of capital had been wiped out and that banks could be expected to fail within two years.”
In the wake the events of November 1, 2017, the Australian Financial Services Group (AFSG) was the second largest banking institution in the country, and one of the largest in the world, having an estimated value of approximately A$50 billion,” ASIC said in a statement.”
The total value of its assets at the end of 2016 was approximately A $70 billion.
“Topics:bankers,business-economics-and-finance,banker-and/or-manager,finance-and-“finance”title Australian Financial Markets: FSU’s collapse leaves bank with A$200 million hole in the hole article The A$150 billion A$250 billion-bankster meltdown was the worst financial crisis since the 2008 financial crisis, but the financial industry is still reeling from it.
The A$500 billion A $1 trillion-bank crash occurred in late 2015 and ended with a $4.6 billion taxpayer bailout.
It also sparked a huge public debate about what the sector should look like and how it should be run.
It was also one of Australia’s largest losses for a major financial institution in terms of capital.
The crisis had its roots in the banking sector’s reliance on capital from state-owned banks.”
A major part of the capital that Australian banks have, the money that they rely on, comes from state and federal governments,” ASIC chairman, Wayne Swan, said.”[It’s] a massive amount of money.
“If you look at it, the financial sector in Australia is probably the second-largest banking sector after the financial services industry.”
The AUSG collapsed in November and led to the largest government-sponsored bailouts in Australian history.
Mr Swan said he expected “significant structural changes” to the sector in the next two years to help it recover.
Mr Hanson has called for an immediate end to A$5 billion of taxpayer subsidies, including the $1 billion in tax breaks and grants, and for banks to be given “robust oversight”.
“If we don’t get that right, we’re going to have an economy that is collapsing,” he told ABC Radio Melbourne.
“And that’s the way it is right now.”
What can be done to stop a financial crisis?
Mr Swan suggested there was a need for a “robusted oversight” system for Australian banks, with an independent regulator that would monitor them to make sure the system was working properly.
“This is a huge problem, there’s not enough oversight,” he added.
“We’re going in the wrong direction and that’s why I’m calling for a regulatory system.”
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