Dear President Donald Trump.
Sharing is caring. Because I care for you and the American People, I want to share with you
something about Banking you and the People may not know. I was the CFO of a Bank post
deregulation until 1996.
Post deregulation the Global Human Resources Industry sold to Bank Boards the proposition
that their existing CEOs could not compete in a deregulated market against overseas CEOs
with Global Banking Experience. Fearful for their Banks’ future profitability in a deregulated
market and overseas banks entering the local market, Boards terminated their CEOs and
appointed CEOs from overseas on large remuneration and benefits packages including mega
bonus opportunities.
When the new CEOs looked at the Bank’s Financial Statements and Profit Centre Lending
Portfolios, they realised it would take years to increase market share and higher profits to
earn their mega bonuses. The Banks’ Treasury Fund Accounts with a huge balance including
Depositors’ Money, provided the opportunity to securitise these Treasury Funds for long term
fixed rate borrowing for short term investment at higher interest rates, for super profits to earn
mega bonuses. Backed by market expectations for low interest rates on long term borrowing,
and much higher interest rates on short term investments, the CEOs proceeded with this get
rich strategy without regard to interest rate volitivity risks.
In 1996 short term investment interest rates fell below long term borrowing rates, and CEOs
entered into interest rate swap derivatives to STOP losses and the end of their careers in
Banking. The high up-front-fees of these derivatives, were NOT accounted for but deferred
until the maturity date of the long term 10 year borrowing. These fees were claimed as a TAX
deduction in the financial year, thereby inflating the Bank’s profit and CEO bonus. On this
basis my CEO expected me to sign the Bank’s Annual Financial Statements and when I
refused, I was sacked on the spot.
I took the Bank to Court and with the support of a Treasury Accounting Specialist provided by
the Profession I was winning and advised to settle. Otherwise, the Bank would appeal and
hound me until I was bankrupt. I expected the Government to Legislate the Banking
Tradition that Treasury Funds including Depositors’ Money cannot be securitised for long
term borrowing and short term investments. Also, the Bank’s Treasury is not a Profit Centre
and NOT part of the remuneration packages of Boards, CEOs etc. This Legislation did not
happen. I knew then that statistically a collapse in Banking would happen which it did 12
years later in 2008.
In 2008 there were 7,077 Banks in the USA. in 2007 the long term interest rate was 7.71%
and the short term average yield 5.02% which fell in 2008 to 1.92%. Outstanding interest rate
swaps were $US356Trillion. Lehman Brothers and Washington Mutual collapsed when the
Federal Government refused to bail them out. This was the cause of the Global Financial
Crisis and will be the cause of the next.
In 2025 there are 4.487 Banks in the USA. The long term interest rate is 8% and short term
average yield is 4.09%. Outstanding interest rate swaps are $US469Trillion. LBERTY TAX is
payable on the trading and maturity of these Derivatives. On the maturity it is $US9Trillion
Revenue to your government.
From 2008 to 2025 is 17 years. The next GFC could happen anytime.
Please see my letter of the 15/4/2025 which details the Banking transactions subject to
LIBERTY TAX.
LIBERTY TAX forces Bank transparency in disclosure of the securitisation of Treasury
Funds, long term borrowings, short term investment and exposure to Derivatives. This must
be legislated by your government to avoid future collapses.
This is the best Sunday Easter Egg present you can give to your Depositors in American
Banks. Make this news loud and clear for all to hear, thanks to LIBERTY TAX.
Happy resurrection Sunday
Derek Smith CA
Your Aussie Mate