Tag Archives: stress tests

Aussie Banks Warned – One Week To Prepare For Meltdown

16 Dec

Your humble blogger has been warning of this for months.

As has Fitch Ratings, amongst others.

Now, according to today’s Australian Financial Review, our Aussie banks “have been given 1 week by regulators to stress test how they would handle a spike in joblessness, plunge in home prices spurred by EU debt crisis.”

In other words, to prepare for meltdown.

According to Bloomberg:

  • Australian Prudential Regulation Authority envision worst-case scenario of 12% unemployment, 30% drop in house prices, 40% fall in commercial property values, AFR says
  • Banks will assume that write-offs, other mitigation measures are unavailable; later stress tests might allow for such steps, AFR says
  • Australia’s banks have A$87.2b of exposure to Europe, or 2.7% of assets, with A$74.6b of it mostly tied to bank borrowers in France, Germany, Netherlands, AFR says, citing RBA statistics

A “worst case scenario” of only 12% unemployment? Some say that we’re already at 8.6%.

No doubt our banks will come through these self-conducted “stress tests” … a la the farcical self-conducted “stress tests” that have been repeatedly passed by EU banks … with flying colours.

It’s all about public con-fidence, you see.

The entire modern financial system is built on con-fidence.

Without your continued con-fidence in the banksters’ system, their obscene wealth-from-debt-slavery machine implodes.

As with every con-fidence trick, it’s just a matter of time before a critical mass wakes up (pun intended).

(h/t ZeroHedge and Business Spectator for this story)

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