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.
A currency shock is being unleashed upon Australia: How high it goes is anybody’s guess. I still say low 82-83 cents with DXY falling further yet as EUR powers on. But everything is sure getting overheated. Dalian is falling: The ASX is staggering under the load. Big Iron is trying but can’t get far: Big
Via UBS’ excellent Jonathon Mott: A few wins for the banks. Are they back on track? After a very tough 2Q when everything seemed to go against them, the banks have had a few big wins in recent weeks. Most importantly, APRA’s light-touch definition of ‘unquestionably strong’ capital even took the bankers by surprise, while
Anna Bligh, Fake Premier of the Australian Banking Association, appeared yesterday at the Press Club and, boy, is her soul hurtling towards Hades: To hold trust in someone or something, one must have reliance on their integrity, their strength and their ability. For the major institutions that have been the foundation of western democracies, this
By Leith van Onselen The Western Australian Government is reportedly mulling whether to emulate South Australia and implement its own bank levy. From The ABC: The WA Government previously expressed an interest in a bank levy similar to that flagged by South Australia, which would tax bank bonds and deposits quarterly at a rate of
The credit-addled AFR comes out swinging for shadow banks today: Shadow banks will protest over the extensive new powers being given to the prudential regulator which may curb their lending, increase funding costs and threaten to exacerbate the severity of any housing market downturn. Big non-bank lenders such as ASX-listed Pepper Group, Resimac, Firstmac, Latitude
By Leith van Onselen Ross Barker, chair of the Australian Foundation Investment Company (AFIC), is the latest rent-seeker to whine over the Turnbull Government’s 0.06% levy on the liabilities of the Big Four banks and Macquarie, labeling it unjustified and ‘piecemeal’ policy. From The Australian: Speaking on behalf of the Australian Foundation Investment Company, which
After last month’s pounding for inventor loans, we’re into phase two today: Bankwest, a subsidiary of Commonwealth Bank of Australia, is slugging existing interest-only owner occupiers with increases of 35 basis points, in the latest move to rein in higher risk loans. The lender is decreasing lending on selected principal and interest products by up
Anna Bligh is hard at work rebuilding trust in banking in South Australia: The Australian Bankers’ Association will campaign against the South Australian government-imposed bank tax until the state goes to the polls next March if it is not defeated in parliament, including daily advertising in local papers and stationing an action group in Adelaide. …ABA
Dalian is soft during the day: Big Iron is copping it: Big Gas does not look well: Those descending triangles on the majors might break. Oil has rebounded but they haven’t… Big Gold still looks weak too: Big Bubble has lost it’s froth: And Big Liar is whatever: Avagoodweekend.
After being suspicious of David Murray when he first emerged as the spearhead of reform for Australia’s banking architecture, we were pleasantly surprised to find he showed great sense and integrity in his inquiry. But, since the announcement of the bank levy, he’s gotten very conflicted and confused, suddenly repudiating positions he held in his
Dalian has just flopped into the positive today: With Big Iron down a little: Big Gas is up a bit as one of Australia’s most evil firms, STO, gouges the entire east coast for better profits: Big Gold is still sickening: Big Banks are trampling the APRA pansies: As Big Liar trades sideways: Another ethicists
By Leith van Onselen ABC’s business reporter, Stephen Letts, penned an article yesterday raising the prospect that the Australian Prudential Regulatory Authority (APRA) could still sting the big banks by raising mortgage risk-weightings: [APRA] has yet to tell the banks what it plans to do with mortgage risk-weightings. All that is known is that they
From the Real Estate Treasurer: Banks should not use new requirements to strengthen their balance sheets as an excuse to hike interest rates for home loan customers, Treasurer Scott Morrison has warned. After warning the banks not to pass on the budget’s bank tax to customers, Mr Morrison said they should not try to increase interest rates on
Dalian is still powering today: But Big Iron isn’t as the AUD rips: Big Gas not happy, either: Big Gold is downright unhappy: Banks are partying after APRA didn’t address risk weights. But it is surely going to… Big Liar is going nowhere: ASX still stuck in the mud.
As expected: This Information Paper sets out the Australian Prudential Regulation Authority’s (APRA’s) conclusions with respect to the quantum of additional capital that might reasonably be expected to be required for the Australian banking sector to have capital ratios that are considered ‘unquestionably strong’. Reflecting the social and economic cost of the global financial crisis,
The AFR has a nice story today illustrating the death of Australia: The Turnbull government’s strained relationship with corporate Australia has come under more duress following some heated exchanges between the Prime Minister and the nation’s leading chief executives at a private dinner in Sydney on Monday night. …The dinner was attended by board members
By Leith van Onselen Back in April, Australian Prudential Regulatory Authority (APRA) chairman, Wayne Byres, delivered a keynote address whereby he warned the banks that they would be required to hold more capital against their mortgage books, noting that “it does not make sense to wait any longer to deal with the question of ‘unquestionably
The world’s crappest bourse knows a policy error when it sees one. As the Aussie flies on RBA wings today: The ASX200 is down firmly and still sporting a nasty head and shoulders topping pattern with a neckline around 5600: Bond yields are getting hosed: Dalian is going nuts: Big Iron is mostly up but
Dalian is weak today: But Big Iron firm: Big Gas has finally caught a bid as the oil short covering rolls on: Big Gold trends still look a little sad: Big Bubble is firm just because: And Big Liar: Market of the day is the AUD/USD which remains a coiled spring at long term resistance
By Leith van Onselen Labor’s pedantry over the bank levy has returned, with Treasury spokesman Chis Bowen labeling Scott Morrison’s claim that limiting the levy to the big five banks only would eventually boost competition as “complete rubbish”. From The AFR: …smaller and regional lenders have quietly increased their home loan rates for investors in
By Leith van Onselen ADCM Services, a consultancy group that specialises in Australia’s debt capital markets, is the latest to warn that that the Turnbull Government’s 0.06% levy on big bank liabilities has made the guarantee by the government to bail out the major banks explicit, which they argue could end up lowering their funding
Dalian is a little soft today: Big Iron is still firming: Big Gas has all but ignored the oil rebound. Very sensible: Big Gold is marking time: Big Bubble is down despite the steepened Aussie yield curve: Big Liar is threatening a little convergence as high flyers come back and MEA mulls a bottom: Finally,
The AFR is whining like a baby today led by former Commonwealth Bank of Australia CFO David Craig: “No international investor has bought a share in an Australian bank for the last month or two as far as I understand,” he says. “Basically the sovereign risk – the fear of what is happening here – has them
All quiet on the Dalian front: Not so Big Iron, getting bashed, except BHP on corporate action, classic pennies on front the steamroller there: Big Gas looks about to break new lows across the board: Big Gold not looking too hot either, forming downtrends: Big Bubble not happy today which is not a good sign
Dalian soft: The spark is gone from Banana Man. Big Iron down. BHP saved by corporate action: Big Gas burned: Big Gold hanging in: Big Bubble deflating: Big Liar drifting: Stagnant market.
