tag:blogger.com,1999:blog-24338064.post4170557080543328511..comments2024-02-11T19:28:27.997+11:00Comments on Personal Reflections: Sunday snippets - crisis response to the GFC, the Australian party system with a dash of rising sea levelsJim Belshawhttp://www.blogger.com/profile/10075614280789984767noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-24338064.post-11831572506230164632013-09-17T04:54:35.970+10:002013-09-17T04:54:35.970+10:00Good morning, DG. Your capital ratio point has bee...Good morning, DG. Your capital ratio point has been discussed here before; kvd in particular has been much concerned with this. <br /><br />I actually agree with you to some degree on the luck issue, but in broader not just bank terms. The whole situation would have been much worse if our currency had not declined just as our trade position was improving. <br /><br />The fact that the banks were net borrowers from the rest of the world was actually also one of our vulnerabilities. Your comment here triggered me to bring up some much earlier writing I did on the onset of the Great Depression.<br /><br />I would still broadly stick to my point, I think, for at least three reasons: our regulatory system was better; the banks' risk assessment processes appear to have been better after that earlier near death experience; and coordination in between banks and government agencies worked well. <br /><br />However, I accept that these variables extend beyond the strength of the Australian banking system itself. <br /><br /> Jim Belshawhttps://www.blogger.com/profile/10075614280789984767noreply@blogger.comtag:blogger.com,1999:blog-24338064.post-59997749184541323772013-09-16T23:58:29.044+10:002013-09-16T23:58:29.044+10:00".... the strength of the Australian (banking...".... the strength of the Australian (banking) system" - Really? Have a look at their capital ratios (shareholder equity) in relation to their asset base. Also, since Australian banks were net borrowers from the rest of the world during the GFC, it protected them from the dodgy exposures of US and European banks (as net lenders). 'Strength' substantially by sheer luck rather than by design I should have thought.<br /><br />DGAnonymousnoreply@blogger.com