Australian banks – still looking for stress relief
Recent weeks have seen credit spreads rallying back through 2007 levels and the highest level of debt and equity issuance by global financials ever, suggesting that we are now in the tailwinds of the global financial crisis. Extreme business models have been busted open, not to return until the primal whispers of human greed and personal incentives again overwhelm the combined forces of institutional memory and common sense. Hitherto stable bank business models have been toppled as the inherent instability spurned from excessive financial leverage was laid bare as a reminder for all stakeholders – shareholders, lenders, customers, regulators and governments.
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