This blogger has lost count of the times that the libertarian brigade at The Australian has argued that bank competition is alive and well, it's just shifted to liabilities. By which they mean deposits. Which, although this blogger disagrees, at least makes some sense.
But when the same set of libertarians argue that Australian banks weren't bailed out during the GFC, because they only enjoyed support to their liabilities, and the taxpayer made money for the privelege, this blogger reaches for his revolver.
Either liability management is a part of private banking practice or it isn't. Of course it absolutely is.
Today it's Janet Albrechtsen who takes up the one-eyed lens and after arguing that the banks need to be more active in their own defence, coughs this up:
Sure, it's depressing to listen to the simplistic attacks on banks. It's frustrating to see how quickly Australians seem to forget that Australia's AAA-rated banks led the world in best practice during the financial crisis. No bank failures here. No bank bailouts either.
I can assure Ms Albrechtesen that it is infinitely more depressing listening to simplistic defences of banks. Take a look at the above chart from an IMF report last year and a more recent article. Australian banks certainly led something during the GFC, or, at least, ran a close third behind the US and UK: the total meltdown of their liabilities.
Read both papers. They prescribe a Piguvian Tax to address the over-reliance on short-term debt. This blogger can only conclude that's too simplistic an idea for Ms Albrechtsen to bother with.
Gotti offers a rather similar piece at BS.