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."

Monday, December 13, 2010

AFR editorial on bank reforms

From The AFR today:

"Caught in a pincer by his nimble shadow Joe Hockey and the Greens, Treasurer Wayne Swan has rushed out a half-cooked bank competition package. Cobbled together without the benefit of a broad inquiry into the post-global financial crisis banking system, it is a mixture of the useful, the useless but harmless, and the positively counterproductive. It fails to address the elephant in the room, the fact that “too big to fail” banks are implicitly guaranteed against failure, which in turn lowers their funding costs relative to smaller lenders such as the credit unions and other “mutuals” that Mr Swan is striving to help…

Mr Swan has lunged for the illusion of having put to bed the issue of inadequate banking competition. The policy seems torn between the competing goals of increasing competition and preserving stability. In the long run it will be judged on its results in increasing banking competition, which are likely to be unimpressive. A fuller inquiry into the banking system would have better equipped the government to devise a package that dealt more effectively with the “too big to fail” banks’ dominance of our lending markets."