Bankers not to blame
(16 March 2010 – Australia) David Murray, the former chief executive of Commonwealth Bank of Australia, has spoken out against the backlash banks have endured following the global financial crisis, saying that the crisis was to blame on an "abject failure of government".
The Australian newspaper reported that Mr Murray believed loose monetary and fiscal policies led to an overleveraged private sector.
Mr Murray said it was 'interesting for government agencies to make comments about remuneration', following intense political reaction in Canberra to bonuses in the financial services industry and the federal government's proposed banking reform package.
'What caused the global financial crisis was an abject failure of government,' Mr Murray said.
'Governments, by their action and inactions in a leadership sense, condone what happens," Mr Murray added.
'Monetary policy was run far too easy for too long (and) fiscal policy was far too loose for too long, so that the world found itself with an overleveraged government sector at the same time as easy money caused an overleveraged private sector."
'The consequences of running easy money for a long time is the labour market will be most attractive to financial institutions who intermediate the money and we finish up paying our bankers more than we pay our engineers," Mr Murray told The Australian newspaper.
'It's very strange for me to hear government agencies coming out and attacking the system which they were a part of and, frankly, they did not supervise.'
Mr Murray said it was 'interesting for government agencies to make comments about remuneration', following intense political reaction in Canberra to bonuses in the financial services industry and the federal government's proposed banking reform package.
'What caused the global financial crisis was an abject failure of government,' Mr Murray said.
'Governments, by their action and inactions in a leadership sense, condone what happens," Mr Murray added.
'Monetary policy was run far too easy for too long (and) fiscal policy was far too loose for too long, so that the world found itself with an overleveraged government sector at the same time as easy money caused an overleveraged private sector."
'The consequences of running easy money for a long time is the labour market will be most attractive to financial institutions who intermediate the money and we finish up paying our bankers more than we pay our engineers," Mr Murray told The Australian newspaper.
'It's very strange for me to hear government agencies coming out and attacking the system which they were a part of and, frankly, they did not supervise.'
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