Paphitis:
Banks in America, Australia (can't speak for the EU as it might be different), are actually rock solid. they are the healthiest businesses which are unlikely to go down any time soon.
I suggest you find out something about banking and the financial system before making such silly comments!
The largest credit institution in the World, Deutsche Bank, is teetering on the edge of bankruptcy as are most of the large banks. The system is collapsing as I told you it would many years ago. Your banks in Australia and those in America ..... in fact the whole system is in the same situation and they have been since before the 2008 financial crash.
Do you comprehend at all that Bank Assets are nothing but CREDIT ,fundamentally their assets are nearly ALL debt! Their liabilities are your and everyone else’s deposits. When debts turn bad there are two options:
Firstly reduce your liabilities ...... default on liabilities .... otherwise known as a ‘Bail-In’ ......... OR
Increase your assets ...... the Central Bank bails them out by buying up their non-performing asset backed debt , i.e. whatever was offered as collateral is then owned by the Central Bank and is sold on at auctions to the highest bidder ..... very often pennies/cents on the Pound/Dollar. YOU lose, not the banks.
Businesses that need to be propped up are strategic industries like the Airlines. Yes, they are getting a lot of help to see them through because they are needed in the national interest once all the COVID stuff is out the way. Also construction, restaurants, hotels, bars, salons, fast food chains, take away, pubs and other tourism and hospitality areas.
You cannot prop-up a business by making loans available if that business has a vastly reduced pool of customers or regulations make it non economically viable. I am afraid the Banks are giving you nothing ....... as usual they are creating more debt which has to be repaid .... or else!
Other areas doing it tough are landlords.
The banks haven't asked for any help and in Australia, if you call them, they will even pause all your mortgages for up to 6 months. I know our banks are highly profitable, and actually quite flush. They are the last businesses to go down along with our resources sector. They got too much money. Worst case scenario for them is that their profits will only reduce but no Bank has said they won't be making a profit. As a result, they are not being propped.
‘Pause’ being the operative word .... you could describe it as just a stay of execution!
Banks have very little money, basically just what is drawer cash and in the ATM’s ..... they hold credit which is not the same thing. Banks create money on demand as debt. You are an asset to your bank because you owe them large sums of money (
I believe you said, around a a million AUD.) Try not repaying your debt, with interest, and you will see Banks are not very accommodating!
To be eligible for assistance, your revenues must drop by 30% or more and be in the red. Banks don't meet that criteria. Other businesses like Airlines, pubs, hotels, etc do.
Your naive belief in the integrity of the banking and financial system in general, is sadly misplaced. It is the Government that provides the assistance, not the banks.
I repeat what is said:
"........... there is no relationship between the (performance of) financial markets and the REAL economy" ............. and that includes the Banking sector.
Watch CNN,BBC, SKY, FOX, RT etc .... they all say the same thing! The markets are going up, whilst economies are collapsing.
