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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: ggersh who wrote (111843)	5/4/2015 3:16:44 PM
From: Elroy Jetson	Read Replies (1) \| Respond to of 218189

More silly Russian propaganda. Why impose such a bizarre alternate reality on yourself? The United States has exactly the same FDIC tax on deposits which both Australian parties are considering. We call it the FDIC insurance Levy, but you could also call it a tax. What's the difference? The 0.05% tax/levy is paid by the bank on their total deposits to cover the cost of bank failures, auditing and supervision. As the Australian bank industry is suggesting, the tax/levy is very much passed on to savers in the form of 0.05% lower interest rates just as it is in America. So instead of earning 2.45% in an HSBC Serious Saver Account you'll earn 2.40%. Shocking! — abc.net.au In America we've moved onto variable rates depending on risk. It's not competitively for riskier banks to pass on their higher insurance cost, so if they're not making more on their risk they're on their way out of business. Traditionally, Australian savers have never lost any funds because the Reserve Board is very aggressive about banks maintaining capital levels and force banks to be sold without regard for the consequences to shareholders or bondholders. When banks have lost capital suddenly as NAB did in 2004 due to unauthorized foreign currency trading losses, the Australian Reserve bank gave National Australia Bank 3 weeks to come up with additional capital or be sold. The CEO was sacked and the Board sold off their choice European subsidiaries, Northern Bank and National Irish Bank, to the Danish Danske Bank at a fire sale price since they needed to close the sale within the three week time period. Loss of safe levels of capital are serious as a heart attack in Australia. Even my account at sickly Citibank was safe at Citibank Australia when Citibank operated at only 0.8% operating capital. Citibank Australia had to hold reserves unusually high reserves of 8.5% rather than 6.5% exactly because the Reserve Bank considered their parent bank at risk. And all that capital was embargoed, with no possibility of transfer out of Australia to the parent Bank. Now the Australian government is considering the possibility that they had better start charging insurance premiums, because it may not be so easy for a troubled bank to sell off assets in today's troubled global economy, and there will certainly be some real estate loan risk in Australia moving forward. That's if you're realistic.