Australian bank funding costs ease

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From the SMH:

Credit default swap spreads have now jumped by almost 55 per cent since late July, when contracts traded hands for under 60 basis points, and almost 30 per cent from mid-September.

…Australia’s banks have already raised $16 billion of equity this year to strengthen their balance sheets, but more recently APRA has signalled some concern that the banks have not done enough to shift more funding from cheaper short term markets into long term debt, which could put upward pressure on costs, particularly as spreads widen.

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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.