Sydney, 17 October, 2008: The Australian Bankers’ Association (ABA) said there is no evidence that Australian banks’ salaries packages have weakened our banks. In fact, the opposite is true because our banks are strong.

The ABA was responding to the recent speech by the Prime Minister who has proposed bank executives pay packages would be linked to minimum capital standards.

David Bell, Chief Executive of the ABA, said: “The ABA will examine this proposal when more detail is made available, but it is not clear to us that the Basel II framework is conceptually deficient. Basel II rules require banks to set aside more capital if the bank’s management takes greater risks.”

"Australian banks are profitable and well capitalised and are not being bailed out by the government. In the current credit crisis, this performance is a testament to the sound management of Australian banks. This is in stark contrast to many banks in the US, UK and Europe which have failed or been partly or fully nationalised.”

For further information:
Heather Wellard
Director, Public Relations
Phone: 02 8298 0411
Mobile: 0409 830 439