Martin North of Digital Finance Analytics has looked deeper into the CEC’s warnings about the derivatives danger lurking in Australia’s banking system, in a 20 June YouTube and blog post titled “The $37 trillion black hole”.
Click here to read North’s post, which includes a link to the video.
Click here to view it on YouTube.
MacroBusiness posted the analysis under the heading, “Is Australia sitting on a ticking derivatives nuclear bomb?”
Every Member of Parliament must read this post! Send it to your MP, and insist they support Bob Katter’s private member’s bill for a Glass-Steagall banking separation to stop banks from gambling in derivatives.
North opened: “There is a chart doing the rounds courtesy of the CEC (an Australian Political Party, who is advocating the introduction of a Glass-Steagall banking separation bill, and which is likely to be tabled late June) which shows that the total value of financial derivatives in Australia is around $37 trillion. I have had a number of people ask about this data, which is not attributed. What does it show, and is it right?”
He then proceeds to confirm that the CEC’s figures, which come from the Reserve Bank of Australia, are correct, and, in fact, notes that other sources put the derivatives exposure of Australia’s banks even higher. A November 2017 study of derivatives in the Asia-Pacific published by the International Swaps and Derivatives Association (ISDA) put the figure at $42.3 trillion, while the Australian Financial Markets Association records $47.2 trillion in notional derivatives outstanding.
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