In the wake of the GFC the view was that the Government would act to protect the Big 4 accounts to the extent possible. The Government would probably act through CBA to shore up the other three.
A bail-in is what could happen if a Government is running short of other options and it may be done in conjunction with other options.
I don't believe that our residential real estate debt bomb would trigger a bail in by itself. That said a global economic storm is intuitively possible in current circumstances. Nobody can get their heads around the metric of 10 years of helicopter money now being squeezed or the sequence of upcoming events...….. except to maybe to suggest that depositors in Italy and Spain are likely to be bailed in first.
Apparently our mean net worth is only around the $250K mark which points to the huge level of debt we are supporting. Worse than that if the fact that Australia its on top of the individual net worth ladder (although with 66% of a punter's tied up in residential real estate our relative position on this ladder is sure to drop).
All I can say is that it is time to be extremely cautious. The totality of global equity and debt markets warrant close monitoring.
