“The negative equity position will, therefore, not affect the ability of the Reserve Bank to do its job,” she said.

Even so, it remained important that the RBA returned to a positive equity position “over time”, and there would likely be an impact on the federal budget in the form of a lack of dividends as the bank rebuilt its equity.

While private companies in such a predicament “would not be a concern”, Bullock said the government provided a guarantee and the bank itself could also print money to meet its obligations, and ”so it is not insolvent”.

Source: The Guardian