Being the first Tuesday of the month, there’ll be lots of attention on the Reserve Bank today, with many hoping for another cut in the official interest rate in time for Christmas.
So I thought that today, we might take a closer look at the RBA too.
Remember that critical joined-at-the-hip relationship between our Big Four banks, and the government’s balance sheet, that your humble blogger has been banging on about lately?
The relationship that means our government must get its budget back in shape, else its guarantees that are the only thing propping up our zombie banks will lose credibility with the ratings agencies?
Michael West at The Age has been looking at those government guarantees too. His investigation has dug a little deeper into the dark heart of our government-banker kleptocracy (my emphasis added):
Public information turns confidential – RBA culls data
The Reserve Bank of Australia and federal Treasury have been systematically purging public information from their databases at the request of the big banks.
During the course of an investigation into the wholesale funding guarantee, BusinessDay found large swathes of information relating to the use of the guarantee had been expunged from the http://www.guaranteescheme.gov.au website.
This culling of public data follows revelations here last year that the corporate regulator, the Australian Securities & Investments Commission (ASIC) had been deleting evidence of the waivers it had provided to liquidators.
Commitment to transparency?
Now the RBA and Treasury appear to have made an even greater mockery of the government’s “commitment to transparency and accountability”. The funding guarantee scheme is an unprecedented concession for the banks – they are underpinned by the taxpayer and, thanks to sovereign largesse, cannot go bust.
Nonetheless, almost all detail relating to more than $100 billion in taxpayer-guaranteed funding has vanished. Only the details of current guarantees survive.
We can only surmise that both the government and the banks are trying to pretend there was never any corporate welfare in the first place. For the banks’ part, it is harder to justify $10 million executive salaries for running a taxpayer-guaranteed institution.
And for the government’s part, the censorship can only be put down to an obsequious backpedalling on previous public commitments in order to appease the powerful banks.
Unconvincingly trying to rationalise their role in the purge, Treasury responded that public information about sovereign support for the banks had suddenly become confidential.
“Further data on liabilities issued under the Scheme by individual participating institutions is not provided on the Guarantee Scheme website for reasons of confidentiality,” a spokesman told BusinessDay.
It was the sort of line which would have made Sir Humphrey Appleby proud.
With Europe in disarray, and the impending prospect of further taxpayer support for the banks – the RBA has recently foreshadowed relaxing the rules on what assets banks can swap for RBA cash – this is hardly the time for there to be any question over the integrity of public institutions and their information.
[click the link to read the entire article, including how the RBA and Treasury tried to cover-up in response to Mr West’s investigations]
None of this should come as any surprise to regular readers of barnabyisright.com.
There are already very big questions over the “integrity” of our public institutions.
As we saw in Funding For Policy Scandal – Australia Is A Kleptocracy, our very system of government means that our political parties depend on bank loans to fund their election campaigns.
It is because the parties do not receive their multi-million dollar handouts from the public trough – a distribution which is based on % of the popular vote – until after the election, when the actual number of votes received by each party is confirmed.
So, they have to go hat-in-hand to the banks, begging for loans, in order to mount their campaigns in the first place.
If that is not a relationship of dependency that is absolutely ripe for corruption, then I don’t know what is.
There really is “An Unholy Alliance Of Politicians And Bankers Versus Ordinary People” –