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Jobs and Career Management in the Financial Markets, Banking & Finance |
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Should banks do more to keep credit flowing?9 February 2009COMMENTSBanks are not charities - they must assess credit on a case-by-case basis. Read all comments »The federal government has been helping out Aussie banks to ensure they don’t get credit crunched as badly as their overseas counterparts. But are our banks keeping up their part of the bargain and providing enough credit to cash-strapped local businesses? Treasurer Wayne Swan has told ABC that banks have “an obligation to ensure there is a sufficient flow of credit in the economy to viable business.” Are the banks playing a fair game, or acting too tough? Last month CBA gave investment company Storm Financial just one day to repay debts said to total more than $78m. And look what happened to Storm. Isn’t it time that the banks started lending more money to support Aussie businesses, rather than just taking it from the taxpayer? Get the credit flowing below.
COMMENTSVippo, Derivatives, Mon 09 Feb 09Could the government please provide more details on what it thinks is a viable business? It's up to the banks to decide this and in the current market, it's not surprising that they aren't as keen to lend. Ever heard of the global credit crunch?! Add your comment »mmmmmm, Insurance, Mon 09 Feb 09Storm deserved to fail - it wasn't "viable". Banks are not charities - they must assess credit on a case-by-case basis. Add your comment »Big Gov, Accounting & Finance, Mon 09 Feb 09The situation here is not as extreme (thank god) as in the US and UK where the government actually owns big stakes in major banks. In Australia the govt's control is more limited. Add your comment »pdmason, Tue 10 Feb 09It isn't just a matter of assessing credit worthiness, the Basel II regime requires banks to set aside more capital for existing/new loans as the credit quality (or credit rating) deteriorates. As such in the downturn we are experiencing, as firms release revised accounts that show a worse credit profile this chews up lending banks' existing capital base and therefore their lending capacity. Add your comment »Evan, Student, Sat 14 Feb 09Banks are for-profit organisations, of course. They are however the largest credit providing institutions in most developed countries. Since a country, and indeed a society is not wholly and solely about maximising $ profits, and banks are a part of our society, they have a responsibility to society - not just shareholders.
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