Rudd and Swan did a lot to help the banks during the crisis. They asked for more.

Great story in today's Australian:

NAB-ANZ secret merger bid at the start of global financial crisis

EXCLUSIVE: Brett Cleg and Scott Murdoch

NATIONAL Australia Bank and ANZ sought to bring down the four pillars policy through a bold merger in 2008 that preceded the depths of the global financial crisis.

Talks between the Melbourne-based institutions were conducted for several months in the first half of 2008, but efforts to win support from the Rudd government for the controversial move failed.

The Australian has confirmed with several senior sources on both sides of the aborted negotiations that the talks took place.

Under the plan, NAB chairman Michael Chaney would have assumed the role as head of the board at the merged entity.

ANZ chief Mike Smith would have kept that position, most notably because at that time NAB had yet to appoint a successor to former chief executive John Stewart.

According to one well-placed participant, there were "significant social synergies" in the deal given that then ANZ chairman Charlie Goode was due to step down and Mr Stewart's replacement as NAB boss had yet to be finalised.

The push intensified following Westpac Banking Corporation's shock announcement on May 13, 2008 that it would buy NSW regional rival St George Bank for close to $17 billion.

But furious closed door lobbying in Canberra over a period of months made it clear there was little political appetite to accept a rationalisation of the banking sector on such a grand scale.

The situation reached an inflection point at what was seen at the time as a surprise, if not curiously timed, statement by Wayne Swan on June 2 prior to heading to a meeting of Organisation for Economic Co-operation and Development finance ministers in Paris.

In that statement, the Treasurer emphatically restated Labor support for the four pillars policy and soon after gave the House of Representatives Economics Committee the task of "identifying any barriers that may impact on competition in the retail banking and non-banking sectors".

Continued...


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