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."

Wednesday, December 7, 2011

Standard & Poor's: Major banks have lower funding costs because of taxpayer support

As per my post below, here is the direct quote from Standard and Poor's issued a few days ago, which explains how their very strong AA- credit ratings for all four major banks--and CBA in this case--rests crucially on their assumption that these are taxpyayer-backed institutions (ie, will be bailed out by the government if there are ever funding problems):

"Our counterparty credit rating on CBA is two notches higher than the [stand-alone credit rating], reflecting our view of a high likelihood of extraordinary government support in a crisis. This reflects our view of CBA's high systemic importance in Australia, and our assessment of the Australian government as highly supportive of institutions core to the national economy."