Australian banks

MacroBusiness covers Australian banks from the perspective of their macro-economic role, as political economy actors, as investment propositions and in terms of financial stability and capital adequacy. Australian banks have played a crucial role in inflating the Australian property bubble, exist within an utterly privileged position as “too big to fail” institutions and operate within a deeply distorted financial architecture that has Australian tax payers well and truly on the hook in the event of trouble. MacroBusiness seeks to define this role for investors as well as change it in the name of the Australian national interest.

27

Why won’t the RBA kill the CLF?

By Leith van Onselen The AFR posted an interesting article yesterday on the blow-out in Federal Government debt, which is projected to pass $500 billion late this year: The AOFM dutifully maintains disclosures showing that as of December 19, 2016, bonds on issue totalled $462.3 billion… The forecasts in MYEFO helpfully show that by June

17

Fitch puts banks on negative ratings watch, APRA ignores risks

Via Forex Live: From the Fitch Outlook report for the Australian banking sector. Fitch Ratings has revised the sector outlook on Australia’s banking sector To negative from stable Change in the sector outlook reflects an increase in macroeconomic risks & pressure on profit growth: Household debt is high & rising relative to disposable incomes Making borrowers

22

Banks to the moon?

I’ve long railed against the fact that the financials index (less property trusts), the XXJ, makes up over half the ASX200, with the big four banks holding over 30% by total weight. Doesn’t give you a lot of choice when developing a robust portfolio. Moreover, overdone correlation between other sectors means that when the market

2

Stocks dodge the building China bond syndrome

Chinese bonds are bid a little today: And Dalian is flat: Under the surface, trouble still lurks, via Bloomie: Here’s another Chinese financial practice that’s prompting high-decibel warnings. So-called entrusted bond holdings are a way for financial institutions to skirt rules on using borrowed money to invest in bonds. How? By getting a third party

4

Big Iron sees light of hope in rising Chinese bond-fire

The Chinese bond-fire is rising again today and it is clearly a mini-crisis that could develop swiftly: Dalian is working it out: But not Big Iron. It sees hope in that fire! BHP is 1.3%, RIO 1.4%, FMG 1% and WHC 3%: Minor falls and broker upgrades must mean buy! Big Gas is fading too: Big

0

Dirt dumped, banks bought

Dalian has opened under pressure again: As Chinese bonds keep selling: And authorities are warning that liquidity will remain tight through the Q1 lending season: Tight liquidity in the interbank market is expected to continue until early February It recommends monetary authorities take steps to prevent the situation from getting worse Liquidity is forecast to get

5

Dirt high-flyers tumble as banks rock the AAA

Big Iron has bifurcated today. Dalian is down a little more from overnight: As Chinese bonds continue to get absolutely flogged: And CNY to fall: BHP is 1.1%, RIO 1.2%, FMG -3.3% and WHC -2%: The high flyers look very vulnerable as the bulks keep falling. Big Gas is firm: Big Gold mixed: Big Debt

8

Bank offshore borrowings retrace from recent highs

By Leith van Onselen On Thursday, the Australian Bureau of Statistics (ABS) released its National Financial Accounts for the September quarter, which revealed a $15 billion (2%) decline in Australian banks’ gross external liabilities (offshore borrowings) in the September quarter, with borrowings also down 1% over the year. Bonds issued offshore (-$11 billion), One Name

3

Big Dirt hit again as China yields rocket

Dalian is unchanged today but my sense is that the bubble is in a spot of bother as liquidity issues spread: Chinese yields are moon-shotting again today: Caixin is downright gloomy: China’s central bank stepped in to urge major commercial banks to lend to non-bank financial institutions on Thursday afternoon after many suspended interbank operations

9

Commonwealth Ombudsman defects to ANZ

LOL, from ANZ: ANZ today announced the appointment of Colin Neave AM as its Customer Fairness Advisor, a new role to help improve fairness of the bank’s products and services for retail, small business and wealth customers in Australia, reporting to Chief Executive Officer Shayne Elliott. Following a distinguished career of public service at the

5

Bad news for banks from Basel

Via Citi:  Basel Committee to set a 75% capital floor as part of Basel IV reforms – Media reports out of Germany (Newspaper – Borsen-Zeitung) are suggesting that the Basel Committee has agreed to set a 75% capital floor for IRB RWA banks.  …with a long-dated implementation period as anticipated – The unconfirmed

4

ANZ joins specufestor tightening

From ANZ today: ANZ today announced its variable Residential Investment Property Loan Index Rate would increase by 0.08%pa to 5.60%pa in response to rising funding costs and changing market conditions. There is no change to ANZ’s standard variable rate for owner-occupier home loans. Fixed rates remain unchanged for both investors and owner occupiers. ANZ Group

16

CBA finds itself innocent of all crimes

Bloody Do-nothing Malcolm and his self-regulation banking balderdash: Commonwealth Bank of Australia’s under-pressure life insurance arm CommInsure said it has not yet found any evidence of wilful misconduct or wrongfully knocked back claims in any of its internal or independent reviews. In a submission to a parliamentary inquiry into the $44 billion life insurance sector,