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Australia Glass-Steagall Bank Separation Bill Introduced, LaRouche Allies CEC Credited

June 25, 2018 (EIRNS)—A bill to instate Glass-Steagall bank separation was introduced today in Australia’s Parliament, by Bob Katter—the Banking System Reform (Separation of Banks) Bill 2018—off the long-term campaign of the LaRouche co-thinkers the Citizens Electoral Council (CEC). In his reading of the bill, MP Katter credited CEC’s Robert Barwick, and a chart of Australian universal banks’ derivatives exposure, circulated by the CEC, which drew attention to the need for a bill, like FDR’s 1933 Glass-Steagall Act that would separate commercial banks from investment banks, thereby protecting clients’ deposits from speculative exposure toxic paper. The July 2017 proposal for an Australian Glass-Steagall bill is available at CEC’s website.

A June 20 article in the MacroBusiness blog entitled, “Is Australia Sitting on a Ticking Derivatives Nuclear Bomb?” begins

“There is a chart doing the rounds courtesy for the CEC (an Australian Political Party, who is advocating the introduction of a Glass-Steagall banking separation bill, and which is likely to tabled late June) which shows that the total value of financial derivatives in Australia is around AUS$37 trillion.”

Author Martin North states that “people are asking about this.”

Australia’s GDP is about AUS$1.2 trillion, one-thirtieth of its banks’ derivatives exposure; the banks could very well lose that much, and quickly, in a new financial crash.

After a very long analysis of the situation, with many charts, North concludes:

“The bottom line is the AUS$37 trillion is a good representation of the current gross exposures in our banking system, and this dwarfs the banks’ current balance sheets, and the country’s total economy. The risks are literally enormous, and in a system-wide banking crash, when multiple parties are exposed, a bail-out if required would likely have profound economic effects. It might be enough to swamp the entire economy. That’s how big the potential risks are. That’s why Glass-Steagall is worth pursuing.”

Now let it be pursued.

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