Mike Smith not afraid to speak out
(30 October 2009 – Australia) Mike Smith, chief executive officer, ANZ, has criticised the Reserve Bank for moving to soon on interest rates.
Mr Smith’s opinions were made clear after he revealed ANZ’s full year profit of A$2.9 billion.
The bank’s profit was down 11 percent from the last year due to bad loan write offs and one-off items.
Mr Smith warned that the board was at risk of overstating the economic recovery, particularly in the retail sector, and that the RBA should have waited until after Christmas before lifting rates.
The head of the bank also commented that he does not believe inflation is a ‘paramount’ threat to the economy.
While he understands why inflation is a concern for many economists and many central bankers, he actually feels right now that it's not something that is paramount.
He believes that Australia should be ensuring that the flywheel of the economy has got its own momentum and is moving the right way before we start worrying about inflation.
If Australia had a good retail spend up into the Christmas period, that really would have got the momentum going, Mr Smith commented.
The bank’s profit was down 11 percent from the last year due to bad loan write offs and one-off items.
Mr Smith warned that the board was at risk of overstating the economic recovery, particularly in the retail sector, and that the RBA should have waited until after Christmas before lifting rates.
The head of the bank also commented that he does not believe inflation is a ‘paramount’ threat to the economy.
While he understands why inflation is a concern for many economists and many central bankers, he actually feels right now that it's not something that is paramount.
He believes that Australia should be ensuring that the flywheel of the economy has got its own momentum and is moving the right way before we start worrying about inflation.
If Australia had a good retail spend up into the Christmas period, that really would have got the momentum going, Mr Smith commented.
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