Corrupt APRA cuts again

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Via the AFR:

The big four banks will face stronger competition from second-tier banks, which will be able to offer cheaper home loans and sharper deposit rates when the regulator moves to even the playing field for banks in the weeks ahead.

The Australian Prudential Regulation Authority is expected to reduce the relatively high risk weighting applied to mortgages issued by smaller banks that determines how much capital they are required to hold to support their lending. That would narrow a key 10 percentage point regulatory advantage that allows the big banks to hold less capital.

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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.