Yesterday’s claim by former RBA Governor—and now, ANZ board member—Ian Macfarlane that Australia’s “Four Pillars” banking policy has protected our banks from the global financial collapse is a deliberate fraud, stated CEC leader Craig Isherwood.
“Macfarlane and his cronies are deliberately ignoring the elephant in the middle of the room—the $14.2 trillion derivatives obligations of Australia’s banks,” Mr Isherwood said.
“More than half of the derivatives exposure of Australia’s banks is held by the ‘Four Pillars’, NAB, Macfarlane’s ANZ, Westpac and the CBA.
“These derivatives obligations are held ‘off-balance-sheet’, and, to date, the authorities—the Government, the RBA, ASIC, APRA and the ACCC—have allowed the banks to disguise their exposure.
“Meanwhile, exactly as the American physical economist Lyndon LaRouche forecast as far back as 1994, derivatives, now valued at $1.4 quadrillion globally, have wiped out huge chunks of America’s and Europe’s banking and financial systems, including Lehman Brothers, AIG, Bear Stearns, and The Royal Bank of Scotland.
“How long will the Australian government continue to ignore the actual crisis in our banking system?” Mr Isherwood asked.
“How long will they allow mums and dads and retirees to deposit and invest and buy shares in banks that carry unpayable derivatives obligations amounting to many times their assets?
“The overnight crisis in AIG and HSBC is simply a continuation of the meltdown that began in July 2007, which no amount of financial bailout can stop.
“It is now evident that governments are worse than negligent, unless they take immediate steps to protect the people from any further fall-out, and put their respective financial systems through bankruptcy reorganisation, and cancel these derivatives and unpayable debts.
“For that reason,” Mr Isherwood concluded, “the Government can no longer afford to delay implementing the CEC’s Homeowners and Bank Protection Bill.”
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