Banks make fools of the press

Poor old Michael Pascoe must also be spitting coffee across the breakfast bench this morning when he reads that headline. Because just two weeks ago he wrote in The Age:

“Big Four no longer banking on guarantee.”

He went on to write:

“There’s been a phoney war in recent months about the Federal Government’s bank guarantee with the occasional Big Four CEO suggesting it needs to be scrapped. As far as the Big Four are concerned, it’s already gone… But the real story is that ANZ hasn’t used the guarantee since July. It hasn’t needed to - and neither do the rest of the Big Four, the benefit of being among the very few AA rated banks left in the world and being based in a strong developed economy with a central bank and regulator that didn’t fall asleep at the wheel. No wonder the Big Four CEOs would happily wave goodbye to the guarantee.”

Ha, ha, ha… Could anyone be more wrong than that? But he’s right about one thing, the central bank and regulator “didn’t fall asleep at the wheel.” Although we wish they had fallen asleep. At least that way they couldn’t stuff things up any more than they already have.

Because far from falling asleep, to follow the motoring analogy, they’ve done worse. They’ve had their foot to the floor travelling at 120km/h driving through the economic equivalent of a school crossing.

But we’ll tell you what’s really phony, the misinformation coming from the banks about the strength of the banks. And even more worrying is the way the mainstream press just laps everything up and takes the crooked bankers’ words as gospel.

This continuing bilge about Australian banks being the best in the world with their AA credit rating is doing nothing more than suckering people into believing everything is fine.

Sucking them into believing it’s a great time to take out a glabzillion dollar mortgage just as interest rates are about to head north and property prices south.