I actually think this would be good. Its a bit hard to mark to market when there is no liquid market and every asset parcel is slightly different.
Wasn't it the change in policy late last year that caused most of this ****?
It would make for a great Monty Python sketch if it weren't so serious.
How safe is your/our money? The CBA has $16B in derivative exposure!!
How safe is your/our money? The CBA has $16B in derivative exposure!!
I actually think this would be good. Its a bit hard to mark to market when there is no liquid market and every asset parcel is slightly different.
Wasn't it the change in policy late last year that caused most of this ****?
How can it make it worse? Valuing potentially good assets at distressed prices doesn't seem to be helping anyone.
Uncle that is very mischievous of you. What are the derivatives??
I would guess that 98% of them are just the run of the mill exchange listed derivatives. Mostly being hedges to hard assets.
The other thing is when a derivative is taken out the reported exposure is not what is at stake. Its in a very simplistic way the margin.
Uncle, you always seem to have knowledge of matters at hand. I do get alarmed about your comments about our banks. I am not asking for advice, I just want to know in your considered opinion.
1. Is there government backed deposit insurance in this country?
2. Do you have any comment on the lender of last resort facility for Australia?
Many thanks in advance.
http://www.theaustralian.news.com.au/story/0,25197,23801057-5013946,00.htmlBanks to bail out fallen rivals David Uren and Richard Gluyas
| June 03, 2008
THE nation's big banks could be forced to bail out the customers of a failed rival - and will be prevented from merging with each other - under the Government's new plan for the sector.
Wayne Swan said yesterday he would maintain the Four Pillars policy, which prevents the nation's four biggest banks from merging but will not stop the planned $19 billion takeover of St George by Westpac.
The Treasurer also unveiled a scheme to protect the deposits of bank customers in the event their institution collapsed - bringing Australia in line with almost all developed countries.
Announcing the scheme, which will cover deposits of up to$20,000 in banks, building societies and credit unions, Mr Swan said customers would get their money back, paid by the government, within a week of their institution collapsing.
Depositors with larger amounts caught in a collapse would get their first $20,000 back, but would then have to wait for the institution to be liquidated or taken over before they got the rest.
If there was a shortfall, other banks could be charged a levy to make up the difference.
The Treasurer said 80 per cent of Australian bank customers had deposits smaller than $20,000, though he noted that the smaller number of customers with larger deposits made up more than half the bank deposit base. The policy is designed to avert the sort of bank run that threatened to send the British building society, Northern Rock, to the wall last year.
Lol.The Securities and Exchange Commission told banks that, despite fair-value accounting regulations, they did not have to use fire-sale prices to value bad assets .
Sorry to alarm you, but it's best to be forewarned?? FYI, I have my money with CBA.
DYOR to be sure.
I guess that means that those on this forum have the inside edge as it seems the average Aussie is almost clueless.
WTF, i thought the first 100k of all bank deposits was insured by the govt. This 20k talk is news to me!
and bad news. i have all mine in the CBA too
might be worth spreading some in 20k lots to anz and nab
bloody hell US and UK public are protected to 100k!
Some of the "call themselves experts" on this forum are very, very average. Don't underestimate the average aussie.
MrBurns,
In the 1970 - 1974 bear market it took the ASX 4-years to hit the bottom, some 64% from its highs. We've only been going 18-months or so but I don't think the depth of the decline did the damage back then, but the time it took. In the 1987 - 1993 bear market the ASX traded in a 30% range for 6-years. I personally think that's what we're seeing now. Somehow another month of patience may not make the grade.
Nick
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