Thursday, October 23, 2008

Money guarantee consequence = Funds block withdrawals

If foreign bank branches lost deposits in Australia, they would have to repatriate funds from overseas, or borrow from international markets, both of which were expensive, he said, and that could lead them to call in loans.

there had been a "very substantial" outflow of funds from foreign bank branches.
clipped from
THE mortgage fund lockout widened yesterday as two of the country's biggest fund managers blocked investor access to $4 billion. Perpetual and AXA said last night they would defer redemptions on $2 billion
a rash of unintended consequences from the Federal Government announcement on October 12 that it would guarantee bank deposits.
Foreign investment banks that had been denied the guarantee lost deposits as money managers shifted funds to banks with government backing.
trend continues the credit crunch will worsen. Banks that lose their deposits could call in loans to businesses and developers or refuse to refinance existing loans.
a sharp increase in redemptions from mortgage funds across the industry".
position of 18 wholesale investment funds was under review
country's biggest mortgage fund, the Challenger Howard Mortgage Fund, put restrictions on investors withdrawing their money.
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