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."
Tuesday, August 28, 2012
How I lifted the lid on the value of bank deposits taxpayers guarantee and don't guarantee
The Financial Claims Scheme protects ADIs against a sudden flight of retail funding, and creditors against the danger ADIs don’t pay them back. While most observers think this insurance, which covers around $623 billion of deposits, is a vital bulwark against ADI insolvency, we now charge nothing for it. Last Friday Reserve Bank of Australia governor Glenn Stevens revealed he was not opposed to doing so. The Australian Securities and Investments Commission also has reservations about the exploitation of credit risk ignorance in the burgeoning “hybrid” securities market, which has raised billions from retail investors by dressing equity up as debt.