WikiLeaks shows CBA chief’s GFC concern
(5 September 2011 – Australia) WikiLeaks cables released last week showed that Commonwealth Bank (CBA) chief Ralph Norris was worried Australia might be stripped of its top-notch credit rating during the global financial crisis (GFC).
According to previously secret US government cables, Mr Norris ''expressed concern'' over a potential cut in Australia's AAA credit rating during a meeting in April 2009.
Rod Eddington, head of Infrastructure Australia and then a board member of Rio Tinto, reportedly said in a separate meeting that he and former Prime Minister Kevin Rudd had ''lost sleep'' over a downgrade in Australia's credit rating.
Australia retained its AAA sovereign rating throughout the crisis, though in late 2008 Standard & Poor's (S&P) said there was growing pressure on the rating due to plunging economic growth.
Analysts at S&P also noted the outside possibility that the government would have to invoke its guarantee of bank funding in late 2008.
The cables also say Mr Norris warned Mr Rudd not to be seen as ''directing the banks'', which the credit ratings agencies would have viewed negatively in their assessment of the domestic banks.
A spokesman for CBA confirmed that a meeting took place with the US consul. The spokesman said the cable was an interpretation of a private discussion and declined to comment further.
Rod Eddington, head of Infrastructure Australia and then a board member of Rio Tinto, reportedly said in a separate meeting that he and former Prime Minister Kevin Rudd had ''lost sleep'' over a downgrade in Australia's credit rating.
Australia retained its AAA sovereign rating throughout the crisis, though in late 2008 Standard & Poor's (S&P) said there was growing pressure on the rating due to plunging economic growth.
Analysts at S&P also noted the outside possibility that the government would have to invoke its guarantee of bank funding in late 2008.
The cables also say Mr Norris warned Mr Rudd not to be seen as ''directing the banks'', which the credit ratings agencies would have viewed negatively in their assessment of the domestic banks.
A spokesman for CBA confirmed that a meeting took place with the US consul. The spokesman said the cable was an interpretation of a private discussion and declined to comment further.
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