NAB and Westpac’s Secret Bailout Revealed

Tapping “offshore capital markets” obviously included the US Fed.

So we wonder, how much did the Reserve Bank of Australia know about this? While it was talking up the strength of the Australian banking system did it know that two of the four Australian banking pillars were desperately seeking loans from the US Fed?

Or, like you, was the RBA in the dark? And what about the Australian Prudential Regulation Authority (APRA)? We’ve been told they’ve done all manner of stress tests and the banks passed with flying colours.

How can that be possible if Westpac and NAB need emergency loans from the US Fed? Was this included in the stress tests?

Anyway, we’d like to know. So we’ve fired off emails to the RBA, APRA and the Australian Securities Exchange (ASX) asking them these simple questions.

1. When did the RBA/APRA/ASX become aware of Westpac and NAB’s loans under the TAF programme?

2. If RBA/APRA/ASX were not aware of the loans under the TAF programme please explain why.

3. If RBA/APRA/ASX were aware of the loans please explain why this wasn’t considered to be important enough to inform the market?

But it wasn’t just Westpac that kept quiet about it.

NAB chairman Michael Chaney must surely have realised what he was saying when he made the following comment at the December 2008 annual general meeting:

“Our traditional banking and wealth management operations are all profitable, strongly capitalised and conservatively funded. In addition, our banking businesses have sound asset quality and are well provisioned.”