Too Big to Prosecute - CBA/Bankwest fraud Senate Inquiry video

Video 5: That stooge from ASIC needs a lesson in how not to be a @$&?head. He danced around those questions like a boxer. Oh yeah, and I think I finally found Where's Wally.

Video 6: That partner from the Receiver made my skin crawl.
 
nowaydude said:
can someone explained to me why bankwest deliberately under valued people's assets - how does this trigger a default?

edit: ill take a shot...
since the property is collateral there is some clause stipulating if the value of it was to drop below a certain % of the loan the borrows default or pay it all back
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Yes. It's called LVR - or loan-to-valuation-ratio. It is a ratio that shows how much equity (or lack of) is available for the property.

Equity (E) is the current 'value' (V) of the property minus loan amount outstanding (L). E = V - L. Pretty straight forward, and yes I did just make that up ;)

If they change the current value of the property, by revaluing it downwards, then the equity can very easily become negative if the outstanding loan was not payed down significantly.

As to your other questions, i think other commenters have a better idea than I do... it's a freakin mess.

Note: If i've just made misleading commments can people please call me out on it, thanks.
 
nonrecourse said:
Greg Medcraft spent nearly 30 years in Investment Banking at Socit Gnrale in Australia, Asia, Europe and Americas. More recently, he was the Managing Director and Global Head of Securitisation, based in New York.

http://www.asic.gov.au/asic/ASIC.NSF/byHeadline/ASIC senior executives

It seems that our reglatory bodies are occupied by the players who created the problems.

Kind Regards
non recourse
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Indeed... Its like Little Red Riding Hood running from the wolf and franticallly knocking on the door of a house crying out, "Help! Help!" only to see the door open and behind it... is another wolf... :/
 
dollars said:
Hi AA

Great thread and I have watched all the video clips.

Does there seem to be any discovery of information that the banks had credit default insurance, or any similar arrangements, and made the claim against the loans they forced into default with questionable LVR's?

Best wishes
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Yes. I have attached the HBOS annual report section which was submitted at the hearing. The credit default insurance is referred to as a "warrantee" clause or "clawback". It is even cleverer than credit default insurance because the "insurance bet win" isnt given to them (this would make it a taxable capital gain), rather the "warrantee insurance win" is deducted from the Bankwest purchase price (ie. reduced consideration). This still leaves the original loss on the books to be used later to offset tax deductions against future income. On its own its quite clever and legal, however when you exploit this clause by intentionally fabricating loan defaults, this is where it gets criminal. ala. Goldman Sachs.

The "smoking gun" will be in the HBOS sale contract which only a Royal Commission can obtain.

2237_hbos.png
 
nowaydude said:
Has HBOS given a statement on this situation? They were obviously screwed over by CBA/BW.
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Not that I know of, but I doubt they'd care. They got a tax payer funded bail-out in 08 so really it wasn't their money that got stolen anyway. I'd think the British taxpayers should be angry but I think they are too far removed to realise.

short 1 min senate hearing teaser clip
https://www.youtube.com/watch?v=Iv2ZgRtO4RU&feature=plcp
 
There was a clip where someone from treasury was explaining the situation to the senators. He basically said that there were two ways the bank west situation couldve played out (default or get sold/merge with another bank) and he said it with a tone almost that it was better for Australia that the CBA deal went ahead.

Did treasury have a say, or have any influence in the selling of bankwest?
 
If Bank West went down the shareholders and the investors who had their savings would have been screwed.

With the takeover byCBA, only the ones that had loans with Bank West were screwed. Ban West obviously had lent fiat out on properties in the bubble that were far in excess of their real valuation..

There used to be a saying "you can't beat City Hall '.. Well you can add Banks to City Hall now

Rgards Errol 43.
 
yeah obviously treasury wouldve rather BW get sold, as it would be bad for a lot of people, but was that a deal that was settled privately without influence from govt/treasury/rba? were any incentives given to other banks who bought them out?
 
^^^^^^ That clip where the bankwest director is denying that the email that the senator had that showed illegal collusion to devalue a customers property was to use bankwests interpretation a sensitization of the customers ASSets.

I have checked my financial dictionary and I can't find that term.

Is that like KY jelly so that bank can most properly ream the client out so the recievers gain a smooth entry? :rolleyes:

Kind Regards
non recourse
 
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