RBNZ exposes corrupt RBA on bank capital

Monday, 17 December 2018

Via Ian Rogers at Banking Day:

A Tier 1 capital ratio of 16 percent of RWA is needed to ensure the banking sector retains creditor confidence after enduring an extreme shock.

This is four times what is was 30 years ago, and Australian banks and their systemically risky subsidiaries in New Zealand are nowhere near well enough prepared for the adjustment ahead.

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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.