any thoughts on beppa price if yes vote?, page-38

“I very much doubt the foundations of our financial system, our pillars of society, would use confidential privileged information to secure an equivalent or better eventual return to cover their present and previous exposure levels, if they were given half a chance to do it without being harassed by a government funded regulator for positively maintaining their cash flows without government assistance.”

What does this mean?

You can be certain that the banks know more than we do and that they would use that “privileged” information to ensure that they get their money back. That is what senior debt holders do!

I don’t get the second bit.

I have worked in banks and dealt with regulators. APRA oversight of credit risk operates at a governance level.They making sure that banks have good Credit policies and systems, and that they use them properly. They would only involve themselves in a specific credit issue if there was potential for systemic disruption. (BBI isn't that big!)

Your suggestion that the actions of the Australian regulators has influenced the fortunes of BBI has no foundation at all.

It is likely that the deposit guarantee (a very good piece of financial policy - it should be said), and the secure funding it provided, may have given the Australian banks confidence to let marginal credits such as BBI run, when they might otherwise have pulled the plug.


Definitely a BEPPA holder only. DYOR