Home > Miscellaneous Musings > Guy Debelle admits putting public funds at risk to boost bank profits

Guy Debelle admits putting public funds at risk to boost bank profits

Direct quote from RBA Assistant Governor Guy Debelle

It would be excessively costly for the financial sector to hold enough capital and liquidity to enable it to survive a freezing of capital markets of the type that occurred in 2008…But in terms of insurance of the system as a whole, at some point, it has to be provided by the public sector.

So on the way up, banks are encouraged by the monetary regulator to leverage up and take profits.  On the way down, the only way of saving this sucker is to have Joe Taxpayer take it in the *ss.

Nice.

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Categories: Miscellaneous Musings
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