How deep will bank losses be?

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Via Morgan Stanley:

As Australia facing recession, Morgan Stanley says that banks will suffer loan losses similar to the global financial crisis, their regulatory capital ratios will fall to about 10 per cent and their dividends to be cut by an average of more than 30 per cent.

“We think there is medium-term valuation support, but it should be some time before investors can rule out the bear case,” says Morgan Stanley analyst Richard Wiles.

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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.