Reader Atlas has down the heavy lifting and answered this blogger's challenge in fine style by explaining Michael Stutchbury clearly for us all:
...isn't Stuchbury simply saying:
a) much of the media has missed the point in that the RBA is saying we need to allow big banks fail without it killing the economy;
b) this flies in the face of much of the bank-bashing that is going on because it says that - far from expanding the overnment support from some players, we should remove it for all (over time); and finally
c) this is all really just a desperate plan to lower mortgage rates a little to help keep the final dying days of the housing bubble alive a little longer
Excellent and thank you Atlas.
The reason for this blogger's confusion is simple. Stuchbury has consistently and universally denied the banks were bailed out during the GFC. If that's the case, how can there be a moral hazard problem to address?
Glenn Stevens has smoked him out.