Macquarie CFO rejects SMH claims
(27 January 2010 – Australia) Macquarie Group has ‘strongly rejected’ claims made by the Sydney Morning Herald’s business columnist, Ian Verrender, that in 2008 the investment bank ‘was in danger of collapse’.
In the article, dated 23rd January, Mr Verrender claimed that when the financial crisis hit, Macquarie relied on the government guarantee to ‘avert a run on its deposit base’. He added the guarantee allowed the ‘refinance of the bank’s heavy debt burden and shore up its of share price’.
Mr Verrender then goes on to say that this ‘gave the silver doughnut a leg-up in turning a profit because of its access to cheaper cash’.
In a letter, the group’s CFO, Greg Ward, fired back at Mr Verrender’s comments saying they were wrong and he disregarded all the public information concerning the bank’s balance sheet and cash position.
The bank maintains that throughout the crisis Macquarie remaining profitable with significant excess liquidity and surplus capital.
The bank’s CFO also rebutted saying that the Australian Government introduced the guarantee as part of a coordinated global response to the financial crisis. To suggest the actions of the Australian Government, or any other, were initiated for the benefit of a single institution is simply misleading and wrong.
In Australia, more than 200 financial institutions, not all banks, were covered by the guarantee. For accessing the guarantee Macquarie pays the government an annual fee, currently in excess of A$200 million, highlighted Mr Ward.
Mr Ward also said that Mr Verrender has again missed the significance of global events by failing to recognise that Australia is part of a global financial system; not separate to it.
Mr Verrender then goes on to say that this ‘gave the silver doughnut a leg-up in turning a profit because of its access to cheaper cash’.
In a letter, the group’s CFO, Greg Ward, fired back at Mr Verrender’s comments saying they were wrong and he disregarded all the public information concerning the bank’s balance sheet and cash position.
The bank maintains that throughout the crisis Macquarie remaining profitable with significant excess liquidity and surplus capital.
The bank’s CFO also rebutted saying that the Australian Government introduced the guarantee as part of a coordinated global response to the financial crisis. To suggest the actions of the Australian Government, or any other, were initiated for the benefit of a single institution is simply misleading and wrong.
In Australia, more than 200 financial institutions, not all banks, were covered by the guarantee. For accessing the guarantee Macquarie pays the government an annual fee, currently in excess of A$200 million, highlighted Mr Ward.
Mr Ward also said that Mr Verrender has again missed the significance of global events by failing to recognise that Australia is part of a global financial system; not separate to it.
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