The AFR’s Chris Joye has written another ripper article today debunking the common view that Australia’s banks are well-capitalised, safe and secure, whilst lambasting Australia’s regulators for allowing bank leverage to get out-of-control:
The PhDs at the major banks and Macquarie “optimised” the remarkably lax self-regulation permitted by Basel 2 and predictably increased the number of times they leveraged their equity when lending against housing from 35 times in 2007 to twice this quantum by 2013.
