Australian banks Australian interest rates

Bank funding cost rocket fries QLD mortgagees

Friday, 8 April 2016

The Australian bank funding cost rocket is firing up the booster as spreads widen worldwide once more. CBA CDS lifted 1.8% yesterday to 121bps but our European proxy, Credit Agricole, jumped 11% to 90bps as quantitative failure stalks continental banks. Our US proxy, Wells Fargo, also added a point to hit 62bps:

Thus although funding costs rose on the day for the CBA, the Australian Ponzi Index fell as Europe took back some bad credit leadership:

Spare a thought for BOQ mortgagees which yesterday found themselves tied to the launch pad directly beneath the Australian bank funding cost rocket blast off. From Macquarie comes the problem:

The full text of this article is available to MacroBusiness subscribers

$1 for your first month, then:

$24.99 / month

$249 / year

Cancel at any time through our billing provider, Stripe

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.