Australian Banks Given One Week To Prepare For European "Meltdown"

Tyler Durden's picture

Whereas previously we had heard extensive horror stories about banks being told to prepare for the end of the world in case the European summit (the latest and greatest one from last Friday which was supposed to find a cure for cancer among other things) failed, and even went so far as to read about preparations for trading in the drachma on a when issued basis, once the summit passed (and it was clear that media posturing would do nothing to fix what has already been a failure and it would be best to remove the threats of "reality" from the public's attention) all such "end of the world" speculation promptly disappeared - after all why remind people that things are now worse than ever.  Until today. According to the Australian Finance Review (link - subscription required), banks down under "have been given 1 week by regulators to stress test how they would handle a spike in joblessness, plunge in home prices spurred by EU debt crisis." Aka a European "Meltdown." And since we don't have immediate access to the article, we leave it to Bloomberg First Word to describe for us what the article says:

  • Australian Prudential Regulation Authority envision worst-case scenario of 12% unemployment, 30% drop in house prices, 40% fall in commercial property values, AFR says
  • Banks will assume that write-offs, other mitigation measures are unavailable; later stress tests might allow for such steps, AFR says
  • Australia’s banks have A$87.2b of exposure to Europe, or 2.7% of assets, with A$74.6b of it mostly tied to bank borrowers in France, Germany, Netherlands, AFR says, citing RBA statistics

Why is this notable? Because unlike before, when media reports were really a propaganda ploy to get European politicians to collaborate (what has now proven to be an impossible task), and nothing but a rhetorical device, this time around, the warning is for real. And, more importantly, we have a sense of urgency, courtesy of the 1 week deadline: the question then is is it really that bad, and does Europe truly have a little over a week for global banks to prepare for the inevitable fall out?

Lastly, how long until our own prudent leaders decide it may be time to push the Stress Test scheduled for next year forward, just in case the "unthinkable" does happen, and US banks end up getting stampeded even as the rest of the world is already prepared for a worst case scenario?

We are confident Tim Geithner will get right back to us asap on all of these open items.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
mayhem_korner's picture

 

 

Well, it's more notice than you get with incoming ICBMs.

SHEEPFUKKER's picture

Fuck mate. Throw another vampire squid on the barbie. 

gojam's picture

Lots of European Bank Holidays coming up and every household will be provisioned to the hilt.

Maybe Santa will give Deutsche Marks to Hans this Christmas ??

PY-129-20's picture

I am not Hans, but I would welcome him. I still have Deutsche Mark - paper and coin. Unfortunately, it was not unusually for the generation of my father and grandfather to change the currency more frequently. That and the hyperinflation may be the reason why my family always invested into Gold and Silver. Having said that, the Deutsche Mark was a stable and good currency.

 

Ahmeexnal's picture

Yet Australian MSM reports nothing of this, nor of any problems with their economy. The Oz sheeple are being led to the slaughter.

Wolf-Avatar's picture

Ahmeexnal, Not all of us are sheep being led to the slaughter ... some of us are on here getting our warnings before others.  :-)

Ahmeexnal's picture

Good to know some are aware.

Now turn up that AC/DC !

ANGUS YOUNG RULES!

Mauibrad's picture

Damn, and I thought Aussie was a true AAA.  Notice the Bloomberg article compared the Euro debt held by Aussie banks to their ASSETS, not their CAPITAL.  

WhatCouldGoWrong's picture

Usually don't laugh out loud when reading ZH, but the picture of V squid sizzleing on the grill did it. Well played, mate!

merizobeach's picture

"Usually don't..."  You don't?!  Bro, I come here not just for my first source of information, but pretty much everyday something makes me laugh out loud!  Today's been good so far; the first two comments on this one both cracked me up.

chipshot's picture

I HOPE ALL YOU PLEBS ARE ITCHING FOR A FIGHT...TPTB AND THE NWO  WANT YOU TO GO POSTAL....TAKE OUT A POLI OR TWO AND MEET YOU 9MM VS 9MM THEY WANT YOU PISSED. WHAT MORE MUST THEY DO? STEAL YOUR HOME, YOUR SSN FUNDS ,YOUR JOB, YOUR SAVINGS,YOUR 401K ,HYPER INFLATE YOUR FOOD COSTS, MEDICAL COSTS, EDUCATION COSTS , DUMB YOUR KIDS DOWN TO F-TARDS IN SCHOOL, STOP DOMESTIC ENERGY ... ALL DONE....YES  ITS ALL THERE FOR YOU TO SEE AND GO BALLISTIC ABOUT. OATHKEEPERS ,CITIZEN PATRIOTS, MILITIAS OF MANY ILK,  FREE MARKET CAPITALIST, BIBLE THUMPERS ,2ND AMENDERS AND 10TH AMENDERS  THEY ARE FLIPPING YOU THE BIRD AND DESTROYING YOUR FUTURE---- DEBT SLAVE POLICE STATE IS THEIR PLAN FOR YOU ...DO YOU AGREE??!!??.......GOT MY POPCORN AND MY  A.K. JUST WAITING FOR THE GO AHEAD.....

whatsinaname's picture

Wasnt today when the US debt/GDP crosses 100% ?

mayhem_korner's picture

 

 

Fake Philly Fed report prolly goosed the fake GDP number and pushed the crossover 'til New Year's.

RMolineaux's picture

IMO, Japanese style, we will continue to scramble and find mitigating measures, so that we will not have a sudden burst, but a gradual deflation of the balloon.  These measures will not, of course, prevent the process of collapse, but only slow it down.

What is interesting about the US situation is that the political "leadership" is simply and honestly totally clueless about what is happening, and continue to kiss the ass of the Wall Street greed platoon.

i_call_you_my_base's picture

I don't think they are clueless. I think it works to their advantage if people believe they are clueless. People are more likely to string up the sinister than the clueless.

Just to be more clear, I think there was a time that they were clueless, but that was about five years ago. Most things now are orchestrated, IMO.

Uchtdorf's picture

Nah, ever since the days of Alexander Hamilton, and if you don't like that, since the days when those honorable chaps got on board a luxury railcar to go to Jekyl Island they haven't been clueless. Our current conditions have been in the works for 100+ years. Got to give credit to the Founding Fathers for the strength of the country and the Constitution for holding back these evil men for so long. But now the gig is just about up. Will the tree of liberty be watered again soon with the blood of tyrants and patriots? Enough of just the innocents dying.

Cole Younger's picture

I would much rather see it fast and hard so we can see Wall St. bankers jumping from sky scapers...It would just be more entertaining IMHO...

RMolineaux's picture

IMO, Japanese style, we will continue to scramble and find mitigating measures, so that we will not have a sudden burst, but a gradual deflation of the balloon.  These measures will not, of course, prevent the process of collapse, but only slow it down.

What is interesting about the US situation is that the political "leadership" is simply and honestly totally clueless about what is happening, and continue to kiss the ass of the Wall Street greed platoon.

Banksters's picture

Is this bullish? BITCHEZZZZZ

 

Cheers!

Thunder_Downunder's picture

Whhhhhoooooooossshhh!

 

Swan: Crickey, what was that? Smells like burning hair!

Moodys: Your AAA credit rating...

Swan: Strewth mate! We only just got it polished!

Element's picture

Been an Aussie all my life and I don't remember ever hearing anyone use those words, crickey or strewth, in common usage, anywhere.

In fact, if you did use them in a conversation, as though they were commonly-used words, people would look at each other, and tend to move away from you, assuming you were a bit of a boofhead.

BigDuke6's picture

i don't think we have to worry,

we have this amazing treasurer called Wayne Swon.

He got a prize from the banking cartel saying he was the best treasurer in the world.

so why worry....

we're cool.... totally.

:/

Element's picture

You must believe in the grey swann, he will protect us and kiss it all better, and provide copious tax funded depository bailouts for the truely needy running the best financial institutions on earth.

He's on our side digger - and I feel a whole lot better about that!  |:-0

BigDuke6's picture

She'll be apples mate.... god help us.

hey i replied to a post of yours below - hope you get a chance to check it.

Element's picture

I was going to be working over Christmas ... if this article is on the money I may not have to ... may not be able to ... there is an upside ...

Winston Smith 2009's picture

"Well, it's more notice than you get with incoming ICBMs."

Speaking of incoming ICBMs:

http://www.youtube.com/watch?v=4ZBRc0VtRiQ

machineh's picture

No worries ... the US has a high-tech nationwide alert system.

When your phone starts buzzing, hit the ATM and then take cover.

Muddy1's picture

ROFLMAO

 

 

Oh, better go to the bank right now........

Captain Benny's picture

Make sure to give them a phone call in advance to have cash on hand or they'll refuse you service for large amounts.  Bank run bitches

fonzanoon's picture

I would like to think the markets are forward thinking. If they knew something was going to happen a week from now they would react now.

CrockettAlmanac.com's picture

You're right. If such a meltdown were expected the stock market would stage a spectacular rally.

machineh's picture

Mwa ha ha ha -- the 'cash on the sidelines' rally, as gas, food, ice and beer are bought with reckless abandon.

Econ 101, biTcheZ!

Oh regional Indian's picture

Perhaps the reason the markets are irrational seeming is because they are truely in the moment. 

They reflect the perfect balance of want, need, greed and oversight or lack there-of at any given instance.

Th edistortions are ours. as is the irrationality.

ori

/this-that-and-the-4th-reich/

DollarMenu's picture

Given the players and all their tools, things are where and what they are because they couldn't be anything else?

Captain Benny's picture

Guns, Gold, and Girls... having the SHTF doesn't sound to bad if you're prepared.  Sounds like EURUSD might go to 1.20 real quick.

machineh's picture

Upgrade to 4G, my man -- Guns, Gold, Girls and Ganja!

Captain Benny's picture

All four have been illegal in some form or another ... TBTB obviously fear one of the 4Gs... I wonder which is most dangerous.  I tend to think women.

TuesdayBen's picture

I vote for gold as most dangerous.

Half the world - the women -clamor for it.

Guns used to get your gold.

And gold buys all the ganja one could ever want.

BurningFuld's picture

Not so fast there Whimpy we got some pretty spensive ganja here.

Element's picture

Ganja just makes you loose your aim, and forget to reload, while thinking deep and stirring thoughts about stuff you realise doesn't matter, if you can even remember it, once you aren't bent any more.

BigDuke6's picture

Yep and aussie ganja is up with the best.

takes away the pain of trying to figure it all out.

Element's picture

Yani (as the Abo's call it) is old-school.  Over the last ten years, more and more its speed and synthetic party-drug muck mixed with energy drinks and hard spirits. And it's number one characteristic is to turn polite and sociable people into destructive and self-destructive arseholes who spread misery everywhere.

I'm not a fan of any of it.

Muddy1's picture

If so, can I take my girls to Europe for a vacay?  I hate to leave my guns at home.

Abitdodgie's picture

 Sorry girly guns a no no in EuropeI will look after your guns n gold while you are away.

CrockettAlmanac.com's picture

Guns and gold can be used to preserve your wealth and freedom. Girls, not so much.

MaggieL's picture

Some of us girls have our own guns...