The author has been described by News Ltd as an "iconoclast", "Svengali", a pollie's "economist muse", and "pungently accurate". Fairfax says he is a "Renaissance man" and "one of Australia’s most respected analysts." Stephen Koukoulas concludes that he is "85% right", and "would make a great Opposition leader." Terry McCrann claims the author thinks "‘nuance’ is a trendy village in the south of France", but can be "scintillating" when he thinks "clearly". The ACTU reckons he’s "an enigma wrapped in a Bloomberg terminal, wrapped in some apparently well-honed abs."
Saturday, August 25, 2012
First ever news story for AFR: Glenn Stevens backs pricing deposit guarantee
Reserve Bank of Australia governor Glenn Stevens has for the first time offered support for the idea of charging banks for the government guarantee on deposits, a move that would compensate taxpayers for the risk linked to the insurance.
Mr Stevens made the remark during Friday’s parliamentary testimony while being questioned by Queensland Liberal MP Scott Buchholz, who said the risk to taxpayers from the scheme was “substantial enough”.
“If the argument is that there should be a charge for the deposit guarantee, personally I’m not averse to that idea,” Mr Stevens said. His guarded support for pricing the so-called financial claims scheme conflicts with the government’s policy of not charging banks for insuring deposits of up to $250,000.
About $623 billion in deposits were guaranteed of February 29, the federal budget’s contingency liabilities show.
Mr Stevens said in February that he thought the value of the deposit insurance was “several basis points,” potentially worth hundreds of millions in annual premiums.
Assuming an annual levy of 0.05 of a percentage point on the industry’s eligible deposits, that represents $311 million in potential charges on the banks or revenue to the government.
The four major banks will be liable for about $250 million.
Shadow treasurer Joe Hockey has previously raised concerns about taxpayer guarantees on banks. “This is precisely why we need a root and branch financial system inquiry,” Mr Hockey said on Friday.