Press Release

Letter to Sydney Morning Herald regarding column published on 19 June, 2017

Sydney, 19 June 2017

In today’s CBD column, Colin Kruger has repeated distortions and untruths that seek to incorrectly centre government and regulator initiatives undertaken during the global financial crisis on Macquarie. 

Firstly, the Government Guarantee was part of a co-ordinated response to the onset of the global financial crisis by G20 countries.  In Australia, more than 200 financial institutions were covered by the Government Guarantee.  All those that used the Government Guarantee were required to pay a fee for doing so. Macquarie was no different from any other Authorised Deposit Taking Institution (ADI) in Australia, and no different in that respect to any of its international banking competitors.

Secondly, Mr Kruger singles out Macquarie’s Corporate and Asset Finance business which he says profited by deploying this funding “to snap up financial bargains that were being offloaded by desperate corporations which did not have this guarantee”.  Macquarie’s total loan assets in fact fell by approximately $1.4b during the period in which the Government Guarantee was in place. At 30 September 2008, shortly before the formal introduction of the guarantee in November 2008, Macquarie’s total loan assets were $30.9b - these had fallen to $29.5b at 31 March 2010 when the guarantee was closed to new liabilities.

Finally, by suggesting that ASIC’s overall ban on short selling, including that of Australian banks, was in particular support of Macquarie, ignores the ban’s global application.  ASIC’s stated purpose of the ban was “to avoid the extreme share price movements that might have occurred in the Australian market if Australia had maintained policies on short selling that were more permissive than its international peers at that time”. The market- wide application of the ban is also emphasised by then-Treasurer Wayne Swan in his book, The Good Fight.

Given Macquarie has addressed these claims on a number of previous occasions and these facts are all on the public record, it is surprising that a Fairfax publication has published them once again. Had Mr Kruger contacted us, we would have directed him to those responses.  We seek a retraction.

Patrick Upfold
Chief Financial Officer
Macquarie Group Limited

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