Government sneaks through APRA ‘bail-in’ law

Discussion in 'Property Market Economics' started by JesseT, 18th Feb, 2018.

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  1. rjw180

    rjw180 Well-Known Member

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    I thought what Martin North was saying was that the bail in rules could kick in before the $250k rule and you could still "potentially" lose your cash anyway.

    Problem with other asset classes is that they aren't going to have a stable value in a crash. What would hold its value best in a total meltdown? Gold bullion in a safe? IIRC even gold dipped at the start of the GFC before it picked up (someone may correct me on this). The explanation I read was that ppl needed to use their gold to cover margin calls.
     
  2. Graeme

    Graeme Well-Known Member

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    I saw that the government's bank guarantee scheme might not be active in the event of a crisis. But I think that the principle of keeping no more than $250K in an institution is still sound, because you might be protected.

    My basic idea was to spread risk, and eliminate potential problems. For example, if you hold shares in your own name, they can be sold at any time. During the GFC some hedge funds restricted withdrawals, and there's the possibility that the parent institution might also go under. (I hold shares in a HSBC index tracker, which might be vulnerable in a banking crisis.)

    You can't eliminate risk of losing money entirely, but you might be able to structure things so that you've got a better outcome. That's what I was thinking.
     
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