I went up to Sydney last week, a dogged Greyhound traveller.
It afforded an opportunity to meet former colleagues from Australia’s Foreign Ministry.
After making good progress, from the outskirts of the city, it was traffic though molasses.
Sydney roads, a reason I left!
But oh the splendour of Sydney Harbour, it leaves many other harbour cities in its wake.
So much beauty around the harbour, houses but many parks and thumbnail beaches – many reaches, virtually touchable from the deck of your ferry.
And the trails ashore, hugging the harbour like the lacework on a magnificent bonnet.
There was a chance on our walk to discuss matters of interest, like the role of banks.
One of the largest marque banks, the Commonwealth of Australia Bank (CBA), has contravened legal requirements of AUSTRAC (the Australian Financial Intelligence and Regulatory Agency), demanding advisement on cash transactions from intelligent deposit machines (IDMs) of AUD$10,000 or more.
More than 53,000 contraventions of the Anti-Money Laundering and Counter Terrorism Financing Act, through the CBA, worth more than AUD$624 million between 2012 and 2015.
Criminal prosecution will probably follow and huge punitive fines.
If there is one thing that banks everywhere don’t like, it’s paying out.
Of course they don’t mind accepting money, such as when they receive mortgage payments!
Which brings me to Bahrain.
Last week the GDN highlighted a proposal for banks to set up a joint fund and come to the rescue of stalled real estate projects.
Marina West is obviously one of the most problematic.
Private developers took large investor deposits and ploughed the money into speculative new projects.
And when the “build forever good times” dried up during the global financial crisis, the developers had no funds to complete the stalled real estate projects.
Investors were left holding a half-finished baby, while the damage done to Bahrain’s image as a key investment location left the government with the job of repairing the country’s reputation.
The baby was passed to the government, which of course set up a high-level committee – as governments do – to sort out the mess.
There was hope at last for jilted off-plan buyers, but for many there is still no resolution and the issue continues to fester.
Now it is no longer an option for the government to step in and fix the damage on its own.
So it seems authorities are now seeking to pass on the baby to the banks.
They are being urged to establish a rescue fund, a resource by which to finish the incomplete developments.
However, expect blowback from the banks. A bank parting with its money in such a manner is anathema.
It would require clients and shareholders alike to cough up, as someone will have to foot the bill.
Don’t expect banks to be the guarantor for such a sinking fund, while the government faces its own financial difficulties.
Instead, the banks will probably indicate it is not up to them to bail out developers in this manner.
The issue rests squarely with the developers. They got themselves into trouble, they should be responsible for resolving the issue.
Under that scenario, unsecured “loans” will be hard to acquire.