Friday, October 30, 2009

"How Henry's mother saved the economy"

That's the title of the wonderful page one story by John Kehoe in today's (gated) Financial Review.

Ken Henry had spent all Saturday locked in the cabinet room with Kevin Rudd and senior ministers trying to ward off the global financial crisis. Now the Treasury secretary just wanted a quiet Sunday lie-in. Then the phone rang.

"I'm really worried!" It was Henry's mother. "Should I go down to the bank on Monday morning and take all my savings out?"

Henry already knew about one respected businessman who had withdrawn $3 million from a bank and stuffed the cash in his briefcase. With his mum worried too, the Treasury secretary decided there was no choice but to advise the Prime Minister to instigate the bank guarantee scheme and the first $10.4 billion of a series of stimulus packages credited with saving Australia from the full impact of the global financial crisis...

A couple of hours after his mum rang that Sunday, the Treasury secretary told the Prime Minister: "You know that discussion we were having yesterday? My mother takes a keen interest."

Henry advised a bank guarantee was needed to secure the country's financial institutions and Rudd announced it that afternoon.

There's more, for a price.

Related Posts

. Ken Henry's devastating question to Senators

. What went wrong: David Gruen

. Godwin Grech has a different take on the panic that erupted one year ago this month