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.
Too late from the Australian Banker’s Association: The issues raised have been unacceptable and do not meet the high standards the community rightly expects of banks. Australia’s banks are committed to tackling misconduct head-on and strongly back the reforms proposed today by the Turnbull Government to penalise bad conduct within the industry. A stronger range
Via the ABC: AMP’s chief executive officer Craig Meller has quit his job with immediate effect after a series of scandals were revealed at the banking royal commission. The resignation was accompanied by an unreserved apology from AMP to its customers. More heads will roll. My question is should the Treasurer Scott Morrison also resign?
From Lyndsay David today: I guess we can all thank god that ASIC and APRA don’t regulate the aviation industry. Because if they did, there would be planes falling from the sky. The Banking Royal Commission is slowly shifting from becoming a serious one-off investigation into misconduct within the financial services sector to nothing short
Karen Maley is livid: Commissioner Kenneth Hayne will need the wisdom of Solomon as he tackles what is fast becoming the most critical issue in the financial sector: how to prevent the $1.6 trillion that Australians have salted away in superannuation savings from being pillaged by unscrupulous financial advisers. More: A group of planners from
It began this morning with Kelly O-Dwyer: Financial Services Minister Kelly O’Dwyer said the government had been vindicated in its decision to establish a financial services royal commission — despite being strongly against the probe and begrudgingly establishing it because of a revolt from the Nationals. …Ms O’Dwyer told ABC radio the government could take
There are so many issues coming out of the Royal Commission into banking that its hard to maintain the outrage. Here is yet another one that might have slipped through in the torrent of misdeeds: Hayne: “As beneficiary you can’t call for the asset which is held on trust for you? Is that right?” AMP: “Yes, that’s
Breaking from ME Bank ME’s standard variable rate for existing owner-occupier principal-and-interest borrowers with an LVR of 80% or less, will increase by 6 basis points to 5.09% p.a. (comparison rate 5.11% p.a.^). Variable rates for existing investor principal-and-interest borrowers will increase by 11 basis points, while rates for existing interest-only borrowers will increase by
And via the ABC: Senior counsel assisting the commission Michael Hodge QC appears to have finally and completely lost patience with CBA witness Marianne Perkovic. Hodge: Ms Perkovic, is the reason that you are dissembling in the way that you are dissembling because you are trying to pre-emptively explain why it took CFPL (Commonwealth Financial
Via Australia’s last journalist standing, Adele Ferguson: It doesn’t get much worse – or serious – than blatantly lying to the corporate regulator on at least 20 occasions, but AMP did just that. The commission’s investigations have also caught the board and senior executives meddling with and changing an independent expert’s report before it was
Let’s recall the revelations of the Banking Royal Commission so far, via UBS: Fraud and Bribery Counsel Assisting, Ms Rowena Orr, QC: “I want to put to you is that NAB knows, & you know, that there were unsuitable loans, there was false documentation, there was dishonest application of customers’ signatures on consent forms &
Via the AFR: Behind-the-scenes discussions between banks, regulators and industry associations are continuing to create a new Professional Banking Council that would govern industry-wide standards of professional conduct and competency, as banks brace for more damage to their reputations as the royal commission re-starts in Melbourne. …The Australian Banking Association has not decided whether it
From ABC’s The Business: Spot on.
Via the AFR: The nation’s third-largest residential property lender is warning brokers that their future mortgage recommendations will need to satisfy strict new internal guidelines and ‘external’ scrutiny, a reference to regulatory or possibly legal action. “We recognise the need for trust in brokers and look forward to public policy discussions about measures that will
Ahead of the May budget Gunnamatta spoke with Leith van Onselen and David Llewellyn-Smith about the economic outlook and the unfolding Australian economic narrative. In a wide ranging discussion Leith and David cover Australia’s reliance on commodity exports and the implication a subsiding global commodity market has for this dependence, as well as the potential
Via a panicky Domainfax and following this week’s WBC tightening: Tom Crowley, National Australia Bank’s acting general manager of home lending, said the bank was collecting “granular” details of a customer’s expenses, and it was keen to work with regulators and other lenders to improve their assessments of borrowers’ finances. …Managing director of mortgage broker Homeloanexperts.com.au,
From the RBA’s new Financial Stability Review comes a look at interest-only loans: Interest-only (IO) loans account for a sizeable and growing share of total housing credit in Australia, now representing around 23 per cent of owner-occupier lending and 64 per cent of investor lending (Graph B1). IO lending has the potential to increase households’
Evil Anna (A.K.A what’s left of hollowed-out former QLD premier Anna Bligh) is busy white-anting bank reform again, via Banking Day: One of the keynote speeches at the Thomson Reuters Australian Regulatory Summit in Sydney yesterday was delivered by Anna Bligh, chief executive officer of the Australian Banking Association. Below is an edited version of some
From The Advisor: The Westpac Group has updated its credit policies so borrower expenses will need to be captured at an “itemised and granular level” across 13 different categories and include expenses that will continue after settlement as well as debts with other institutions. The changes, which apply to all loans submitted to any bank
This is big, via the AFR: Home loan applicants at Westpac will have to reveal spending on everything from pet care to tax and toiletries, under a tough new “responsible lending” regime being introduced from next Tuesday. …”We are making changes to understand the granularity of our customers’ expenses and liabilities,” the bank is telling
Via Banking Day: …the allegations started to fly after police raids on two business premises and a private home. The action this week is the next stage in a process that started earlier this year, when detectives from the NSW State Crime Command’s Financial Crimes Squad established Strike Force Napthali to investigate allegations of corrupt
By Leith van Onselen The CEO of Westpac’s business bank, David Lindberg, has warned that sky high housing prices and reduced home ownership in Sydney and Melbourne is starving budding entrepreneurs of obtaining funding, posing a risk for the productive economy. From The AFR: …housing remains the most common form of security required by banks
Via the AFR: The financial intelligence regulator AUSTRAC has stolen the spotlight from Commonwealth Bank CEO Matt Comyn on his first day in the top job with allegations that the bank broke the law by knowingly opening transaction accounts for customers it had reasons to suspect of money laundering. Among the transactions AUSTRAC says the
By Leith van Onselen The ABC’s business editor, Ian Verrender, has written a ripper article today explaining why Australian mortgage rates might soon start to rise: Official rates may not be going anywhere any time soon… But tremors are roiling through global money markets that will flow directly through to higher domestic rates. Given the
More excellent work from UBS’s Jonathon Mott today: Royal Commission and Responsible Lending Mortgage affordability and borrowing capacity has been a ‘hot’ topic within the banking industry over the last few years as household debt and house prices have escalated. Given increasing evidence of loose mortgage underwriting standards by the banks APRA has raised concerns
Evil Anna was in full flight yesterday: The Australian Banking Association chief executive Anna Bligh has urged the federal government to ensure that any regulatory changes made in the aftermath of the Hayne royal commission remain balanced or risk unintended consequences. “Tightening access to small amounts of credit can push more vulnerable customers out of
The AFR did a whack panel on the banks yesterday: If the morning session of The Australian Financial Review Banking and Wealth Summit was dominated by the issue of how to ensure senior bank executives get their pay docked when they’ve overseen major stuff-ups, the afternoon’s sessions looked at whether housing is the banks’ new
According to the stock market, Australian banks are not well. Let’s start with the technicals. The mortgage monsters – CBA and WBC – are both caught in bear markets with the former down -25% and the latter nearly -30% from 2015 highs. Both are exhibiting bearish descending triangle patterns and both are at crucial support
More whack stuff from the AFR today on brokers: Brokers at Commonwealth Bank subsidiary Aussie Home Loans overwhelmingly favoured its owner’s mortgage products but sold under a number of different brands according to data provided by the broker to the Hayne royal commission. …in 2015 as much as 39.7 per cent of the mortgages the
Via the AFR: Commonwealth Bank was being pressured by the prudential regulator to appoint external consultants and fix its flawed home lending data almost 2½ years before the Hayne royal commission began exposing the big four for sloppy administrative errors and irresponsible lending. The Australian Prudential Regulation Authority’s frustration with the failure of Australia’s biggest
ABC’s The Business on Thursday evening ran a segment on the $50-billion mortgage broking industry, which has been accused of dodgy dealings during the Banking Royal Commission. The segment covers the trailing commissions, skewed incentives, and risks inherent within the broking industry, with consumer organisations like Choice accusing the industry of selling borrowers larger, more
