INDUCED RUN

by Margaret Pearson

The latest in a wave of banking collapses and instability, the Australian Prudential Regulation Authority (APRA) has been forced to step in and take over Commonwealth Bank’s Dollarmites banking program. Following global bailouts and backstops to the tune of $25 billion for Silicon Valley Bank and $100 billion to Credit Suisse, APRA has committed $16 million dollars to ensure the safety of the deposits of over 800,000 school children.

Instability began for the troubled Dollarmites program after the popular game Fortnite released a new John Wick 4 promotional skin. In the span of minutes, over $700,000 of withdrawals were processed by CBA as children rushed to get their tiny hands on the new item. Eerily similar to the SVB collapse, rumours began to spread like wildfire on social media, questioning the adequacy of the Dollarmites reserves. In the comments of the YouTube video “Baby Shark Fights Spiderman IV”, user XxGamerLuke2010xX drew attention to the program’s heavy reliance on long dated residential mortgage backed securities.

“Someone just snapchatted me a screenshot of CBA’s Q2 2023 report, are you guys seeing the RMBS on their books?” he added, “I’m seeing a serious duration mismatch here.”

EthanPlaysClashOfClans replied “Yields have skyrocketed on ICAP for these things, they might be lucky to get 60 cents on the dollar right now.”

While top executives at Commonwealth Bank have branded this sudden rush as a “Black Swan” event, leaked internal modelling has suggested the bank was aware of these risks as early as October 2022. In a spreadsheet acquired by PULP, the program’s indicator of depositor flight was at an all time high, factoring in variables such as the VBucks/AUD exchange rate and the amount of convenience stores stocking Nerds rope within 500 metres of primary schools.

CBA CEO Matt Comyn has assured customers that the broader bank is not affected by the run. In a statement to the press, he branded the whole event as a “stupid but otherwise quite small fuck-up,” adding it was primarily caused by “the money not being in the right fucking accounts.”

While the specifics of the bail-in are unknown, APRA has indicated it is considering triggering the bank’s Additional Tier-1 Capital Notes.

“This is exactly the kind of event these instruments are designed for”, said a senior supervisor within the agency’s capital markets teams.

Following a major illiquidity event, the notes may be converted from bonds to a 50/50 mixture of the bank’s equity and vouchers for Yummy Drummies at flexischools.com.au.

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