Defaulting banks - where will it stop?

[Magda Hassan]

We have community banks here which are very good. Bendigo bank is probably the best known but there are others. We also have credit unions most of which are occupationally based - Teachers Credit Union, Police Credit Union etc. Others are geographical/locational. Annecdotally people certainly have a better experience with them than the big banks. We have 4 big banks (Commonwealth, Westpac, ANZ, National Australia) and there is legislation which prevents these banks from taking each other over as I am sure they would have by now if it was not in place. There is much more regulation of the banking industry here than in the US. Certainly, none of the banks have disappeared and the government guarantees deposits in these banks. We didn't even have a recession (technically) let alone a 'Depression'. But that is because we are tied in more to the Asian economy and mostly China as a supplier of minerals and energy and other raw materials. Life has gone on here fairly much unchanged but there certainly have been foreclosures and job losses and business closures. Just more so than in the last 30 years which, to my observation, hasn't been that great for anyone regardless of what the economic statistics have said. We've had our own housing bubble and jobs lost to overseas over the decades.