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Ive thpight about this before. If it was a tax on profits do you think it would effect borrowing costs? I'm not sure that it would. In fact if the australian gov had a war chest for catastrophic events I'd expect our banks would get finding easier / cheaper.

I have to say thank you for that post mark. It is good to read something balanced yet influential. Very interesting about the smaller operators having the bigger capital ratio requirements. A couple of points thoug on your sources thoughts; A) comparing big four banks roe to the very best...

I would argue our regulation allows our big four banks to make super profits to the exclusion of others. All the more reason for a banking super profits tax that can be used as a war chest for an adverse event.

Exploration does not necessarily yield a result I.e. a mine. It is more appropriate to see it as a cost in my view rather than capex. It would be like the time spent at a real estate company committee meeting being capitalised because they may set up a new office in a new suburb at the end of...

I suspect to paint the illusion of bulletproof big four banks, our gov has allowed our banks to issue covered bonds. These instruments are as safe as houses given they are covered by depositors who are meant to be first in queue in a bank liquidation but now sit behind these special bonds. So...

Yes those examples are very helpfull to see how with a small amount of cash we can have a gigantic broad money supply. Ie deposits can be far larger than cash. These deposits are considered bank liabilities like each of the deposits into your safe above are all liabilities to you. To a bank...

In summary to te op: does private debt matter? Yes it does and while serviceability is a part of the reason why equally important is the effect private debt has on the money supply. Without a thirst for debt asset values would be far lower than they are. Inflation has been subdued in...

While I am almost certain many really dont care, I love talking about this so here goes; Frb still requires one dollar of deposits to make one dollar of loans unless the banks capital itself is loaned out. The multiplier effect is about the money written in loans often coming back in further...