Regulators must stop covering for bankrupt banks

Citizens Electoral Council of Australia

Media Release 11th of January 2012

Isherwood: Regulators must stop covering for bankrupt banks

The ongoing cover-up of the actual bankruptcy of Australia’s major banks and financial institutions, by the regulators who are supposed to police those institutions, is a crime that must be stopped now, Citizens Electoral Council leader Craig Isherwood said today.

Isherwood was responding to the revelation that Australia’s bank regulator, the Australian Prudential Regulation Authority (APRA), had refused a Sydney Morning Herald FOI (Freedom of Information) request to release its “risk registers” of Australia’s leading financial institutions.

The 27th December Sydney Morning Herald reported that APRA’s general counsel, Warren Scott, advised against the release on the grounds that releasing the information “may affect the stability of Australia’s economy”.

Isherwood accused APRA, the banks and the government of colluding to keep the public ignorant of the true state of Australia’s supposedly “sound” financial system.

“The APRA revelations are no surprise to the CEC, because for close to two decades we have known and reported that Australia’s banks are bankrupt,” he said.

“APRA’s behavior is an insight into how desperate the government, the banks and the regulators are to keep the truth from the public.”

Isherwood recounted how Australia’s other regulator, the Australian Securities and Investments Commission (ASIC), in 2005 threatened the CEC when its June 2005 New Citizen newspaper headlined “Mother of All Bubbles” reported how heavily Australia’s banks were exposed to dangerous derivatives financial instruments—the very derivatives that later bankrupted Lehman Brothers and blew out the global financial system.

ASIC threatened to charge the CEC’s directors for giving financial advice without a licence.

Isherwood continued, “ASIC—the same regulator that later let the Commonwealth Bank and Storm Financial prey on vulnerable people and destroy their lives—threatened the CEC for showing the banks were in trouble in 2005, yet, criminally, the Sydney Morning Herald FOI request revealed that APRA didn’t compile risk registers on the banks until after the GFC erupted in September 2008.

“The CEC’s case proves the regulators were well and truly warned in advance. And they shouldn’t try to hide behind the bureaucratic excuse that ASIC and APRA are different agencies—the CEC distributed 300,000 copies of that same New Citizen exposé nation-wide.”

The issue, Isherwood said, is that since the globalisation “reforms” of Hawke and Keating, the Australian financial system has been exposed to the same legalised stealing by banks that has bankrupted the rest of the world, but the government, regulators and banks are trying to cover up the fact that Australia is in the same mess.

He said, “Instead of admitting the problem, the government is desperate to stick with the policies that caused it, because those policies give their financial masters in the City of London banking system the power to dictate to nations.

“The major parties are not screaming about this, because they are no more than lobbyists for the financial interests of the private banks; instead of protecting the people, they are sacrificing the people to maintain the power of the banks.

“The CEC is the only institution in Australia with credibility on the financial system, because all along our sole concern has been to return to the kind of financial system that served Australia so well during WWII, when the Commonwealth Bank—our national bank—directed the banking system to serve the needs of the nation and the people.”

Isherwood concluded, “It’s time to stop covering up the banking crisis, and address it. The CEC would put the entire financial system into receivership to sort out the bankruptcy, and establish a Pecora Commission to clean out the corruption between the banks, regulators and government.

“Most importantly, the CEC would establish a new national bank that can direct as much credit as the nation needs to put everybody into productive work, building infrastructure, and creating high-skilled jobs in expanded agriculture and manufacturing industries. There’s no limit to the amount of credit a national bank could issue, if we have the manpower and materials to put to work.”

For the CEC’s record warning of the 2008 meltdown, and our solutions to the ongoing crisis, click here for a free copy of the feature DVD, the Homeowners & Bank Protection Bill—The Only Solution.
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