Perth Now AAP August 09, 2012
THE Commonwealth Bank of Australia says its acquisition of Bankwest saved the Australian economy from a major financial shock during the global downturn.
CBA group executive David Cohen told an inquiry in Sydney today the company's financial strength allowed it to acquire Bankwest in 2008 from its UK-based parent HBOS.
"That acquisition proves significant in maintaining public and investor confidence in the stability of the Australian financial system," Mr Cohen told the senate inquiry into the banking sector in the aftermath of the 2008-2009 global financial crisis.
"While some commentators have pointed to the acquisition price of approximately $2 billion as 'a bargain', what is less well recognised is that CBA also had to source $17 billion to replace Bankwest's funding liabilities.
"In essence the Australian economy was spared a potentially significant financial shock because of CBA's ability to acquire Bankwest."
Mr Cohen also said that CBA would support global efforts to "curb the re-emergence of risky behaviours", which led to the global downturn.
"We want to continue to work with government and regulators to ensure that the balance between system security and competition is appropriate."
Abacus, the industry body for credit unions, also appeared before the inquiry and called for an independent inquiry into the 21st century Australian financial system.
The inquiry continues.