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.

8

APRA delivers threatening lettuce leaf to banks

Via Banking Day: APRA will insist on more consistent rules on the assessment – and reassessment of borrowers over loan serviceability, a measure intended to bolster other rules that, in effect, may restrain credit growth. In guarded language in a letter to all banks and ADIs yesterday, the Australian Prudential Regulation Authority said a revised

9

Market applauds Domainfax’s evil plan

Iron ore futures are flat after overnight falls suggesting a decent hit tomorrow but holding on despite Chinese house prices and sagging coking coal futures. The miners are down: Big Gas is weak despite strong oil. OSH is flying on a Goldman upgrade: Big Gold appears headed for a correction: The Big Debt bull is still

16

APRA fiddles on bank risk while Rome burns

Cross-posted from The Conversation: Australian Prudential Regulation Authority (APRA) chairman Wayne Byers has made it clear the bank regulator will be cracking down on bank capital levels this year. Bank capital reserves are a loss-absorber, designed to protect creditors if banks suffer significant losses. That protection, in turn, will – ostensibly – prevent panicked withdrawals

8

Fortescue blasts to new highs

The Big Iron rocket is punching skywards again today as Dalian adds another 1% to overnight gains: FMG is powering towards its highest intraday price since the GFC and will presumably break the closing price today: A technician would suggest an $8 target then on to the all time high. Macquarie has more on what could

9

Aussie banks exposed to double bubbles

By Leith van Onselen A day after ANZ bank warned that Auckland’s housing shortage would worsen in the period ahead, ratings agency Standard and Poors (S&P) has followed suit. From Interest.co.nz: The credit rating agency estimates a housing supply shortage of between 30,000 and 40,000 dwellings in Auckland. “With banks reporting a tightening in lending standards for

16

Morrison office melts down over Bligh bank bribe

These folks are pathetic: Scott Morrison’s communications director has left the Treasurer’s office abruptly amid a storm over the government’s relationship with the big four banks and the appointment of former state Labor premier Anna Bligh to lead the Australian Bankers’ Association. The communications director, Sasha Grebe, left over the weekend when it became clear

8

Big Iron up as China boosts coking coal

Big Iron is firm today as China has announced the suspension of coking coal imports from North Korea. Not a trivial amount of 22mt. Dalian is 1.5% and coking futures a bit more. Of the majors only FMG is up, however, for no obvious reason: Big Gas likewise is looking a bit toppy: Big Gold

67

APRA warns on climate change risks

Guest post from Kate Mackenzie of the Climate Institute. APRA’s Geoff Summerhayes on Friday delivered a whole speech entirely about climate change risk at the Insurance Council of Australia conference on Friday. It’s the first time any of Australia’s financial authorities have so clearly addressed this topic (although many of their international peers have been doing so almost two years). So,

6

Australia’s impenetrable banking swamp

Let us recall that right now there are no fewer than seven Australian banking inquiries underway or recently concluded: a New York court investigating BBSW rorting; same at ASIC; Parlimentary hearing into banking whatever; Ombudsman Small Business Loans Inquiry; an industry inquiry into banking remuneration; a new industry funded victims tribunal; APRA investigating “risk culture”. All

39

Bligh’s 30 pieces of silver pay dividend day one

No time wasted here betraying the Australian people: Former Labor Premier Anna Bligh has rejected her party’s calls for a banking royal commission, after signing on to be the next chief lobbyist for Australia’s major banks. Ms Bligh was on Friday announced as the new chief executive of the Australian Bankers’ Association, the peak lobby

56

Another lunatic FHB solution

From the ABC, the lunatics are in complete control now: A Federal Government MP has devised a “creative” solution to the housing affordability crisis. Andrew Broad, the Member for Mallee, wants banks to forgo a deposit from first-home buyers who have a three-year rental history. He argued if the mortgage repayments were roughly the same

36

Anna Bligh appointed chief banking parasite

OMG: Sydney, 17 February 2017: The Chairman of the Australian Bankers’ Association, Andrew Thorburn, today announced the appointment of Anna Bligh to lead the ABA as it continues its work to strengthen trust and confidence in banking and deliver better outcomes for customers. “We are excited to appoint Anna as Chief Executive Officer at such

14

CBA: Investor loan data is bunk

Via Banking Day: The carnival of outsider analysis of public domain data on at least one hot topic in Australian banking comes with a vital caveat, Commonwealth Bank claimed yesterday at an investor briefing. The flexible credit standards and more than variable pricing of residential investment loans lately was a talking point at the briefing,

30

Is the interest only mortgage dying?

From Domainfax: Macquarie Bank property borrowers will have to disclose their spending on everything from footy to fashion under tough new credit rules about to be introduced. Borrowers seeking a loan will be asked for details on their spending in 12 separate categories covering household and discretionary spending to asses eligibility for a loan. The

54

Gotti panics about BankWest

From Gotti today: If the banking industry follows the Commonwealth Bank-owned Bankwest and tightens the criteria for negatively geared loans, we will see a fall in dwelling prices in parts of Sydney and Melbourne. Indeed, if you want to know what might happen, my suggestion is that bankers visit Vancouver, where dwelling turnover is down

11

Pressure builds for Parliamentary banking inquiry

By Leith van Onselen After narrowly holding-off a banking Royal Commission in September, internal pressure continues to build on the Turnbull Government for a warts-and-all inquiry into Australia’s banking sector. Last week we witnessed Coalition MP George Christensen pledging to support Bob Katter’s private members’ bill to set up a Commission of Inquiry into the

36

Flufferfax screams at Bank West

Will no one think of the specufestors! Flufferfax will: Bankwest’s axing of negative gearing benefits for new – and some existing – investor housing loans is being used by Australia and New Zealand Banking Group and National Australia Bank as a marketing opportunity to attract disaffected borrowers looking for alternatives. The bank, owned by Commonwealth

15

BankWest (CBA next) kills negative gearing for loans

Oh dear! Via the AFR: Bankwest is set to rock the $1 trillion mortgage market and more than 1.5 million property investors by axing negative gearing benefits that drive lucrative residential property investment, particularly in Melbourne and Sydney. The bank – owned by Commonwealth Bank of Australia, the nation’s largest mortgage provider – will announce on Monday that generous

3

Big Iron firms again

Dalian is roughly flat today after overnight gains: Big Iron is modestly up too though FMG’s possible double top still lurks: Big Gas is rebounding after OPEC minister comments supported oil: Big Gold is off. Not sure it can get much further unless Donald does something more stupid: Big Debt continues its sneaky bull market.

41

CBA sends shockwave through specufestor lending market

By Leith van Onselen A day after its subsidiary, Bankwest, slammed the brakes on property investment lending for new customers, its parent, the CBA, has done likewise. From The Australian: Commonwealth Bank of Australia will be turning away property investor customers of rival banks wanting to refinance their loan. …the nation’s largest lender has told