Australian banks

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.

23

The politico-housing complex devours itself

The MSM bank protection racket is in full swing, at the AFR: London-based investors have warned National Australia Bank chief executive Andrew Thorburn that they consider Australia a less stable and less consistent economy for investment after the South Australian budget hit the big four banks and Macquarie with a surprise $370 million tax. Speaking

21

Academic goose squawks on bank tax

From Dick Holden professor of economics at UNSW Sydney Business School via AFR: We are now through the looking glass on company taxation. We have industry-specific taxes based simply on which companies are profitable and what focus groups think about those companies. This is terrible tax policy. Though all taxes are distortionary, the primary goal of sound

1

As Australia goes ex-growth so does the ASX

Dalian continues its recent pattern of firming at night and sagging during the day today: Big Iron is mixed: Big Gas is still stinky: Big Gold is up: Big Bubble is reeling: And Big Liar is as mendacious as usual as REA breaks out: As Australia goes ex-growth so does it’s share market. Avagoodweekend.

30

NAB joins specufestor interest-only smash

From NAB: NAB has today announced changes to its variable home loan interest rates, effective Friday 30 June 2017. The following three changes have been announced: The interest rate for owner occupiers making principal and interest repayments will decrease by 0.08% per annum, to 5.24% per annum The interest rate for owner occupiers making interest

39

Bank protection racket explodes

The conniption begins, from Chanticleer: Bad policy clearly breeds bad policy, as shown by South Australia’s $370 million tax on the big four banks and Macquarie Group. But South Australian Treasurer Tom Koutsantonis has created a problem for himself by aligning his “super profits” tax on the banks with the state’s share of the national

41

SA adds 0.015% to bank levy

Cat meet pigeons: Australia’s big four banks plus Macquarie will be hit with a new state-based version of the major bank levy which will reap $370 million over the next four years for the South Australia Government as it ramps up spending on infrastructure in a struggling economy. South Australian Treasurer Tom Koutsantonis said the

12

Is APRA about to whack the banks again?

It should, via Bloomie: …announcement in coming days from the Australian Prudential Regulatory Authority, which is due to say whether it will require the banks to hold more capital against their mortgage books as part of a wider update on capital requirements. Despite recent steps to rein in their exposure to the riskier areas of

8

As global stocks soar, ASX crumbles

Dalian is wandering aimlessly today: Big Iron is mostly up: Big Gas is burning: Big Gold is correcting: Big Bubble has had its run seemingly: Big Liar is soldiering on: And a bonus chart today, hope your enjoying Australian exceptionalism: If not, try the MB Fund launching July 1st with a 70% international equities allocation. Sign

5

Mortgage arrears resume climb

Via S&P: The number of delinquent housing loans underlying Australian prime residential mortgage-backed securities (RMBS) increased to 1.21% in April from 1.16% a month earlier, according to a recent report by S&P Global Ratings. Part of the increase reflects a decline in outstanding loan balances, but we believe interest-rate rises announced by different lenders during

16

Bank levy passes with conditions

By Leith van Onselen In a slice of good news, the Senate last night passed the bank levy bill after Labor voted for it. However, One Nation opposed the levy, with Senator Brian Burston describing it as a “lazy, ugly, cheap solution”. Meanwhile, the Senate’s eco­nomics legislation committee has recommended that the levy should be

14

Now Moody’s downgrades the Dumb Bubble

Drip, drip, drip. The Dumb Bubble cops another downgrade in Australia: Moody’s Investors Service has today downgraded the Baseline Credit Assessments (BCAs), long-term ratings and Counterparty Risk Assessments (CRAs) of 12 Australian banks and their affiliates, reflecting elevated risks in the household sector which heighten the sensitivity of the banks’ credit profiles to an adverse

15

Time Fake Premier Bligh resigned

Via the AFR: The chief executive of the Australian Bankers’ Association Anna Bligh has zeroed in on the development of government’s major bank levy by criticising the lack of industry consultation and the shifting series of rationales put forward for the levy. “Neither appropriate process have been followed or sufficient consultation been allowed,” Ms Bligh said.

9

As federal debt passes $500b, why won’t RBA kill the CLF?

By Leith van Onselen Fairfax has posted an interesting article on the blow-out in Federal Government debt, which is about to pass $500 billion: The Turnbull government will break through the country’s former debt ceiling this week, breaching the $500 billion mark as it doubles the credit card bill it inherited from Labor. On Tuesday,

13

Enjoy long weekend, buy a bank

That seems to be the depth of reasoning overtaking the share market today as banks soar. After all, nothing says buy banks more than a crashing global yield curve and an even more rapidly deteriorating local economy. Booya! Go figure. Meanwhile, Dalian is OK so far: Though Big Iron is not so good following overnight

4

AFR continues pathetic campaign against bank levy

By Leith van Onselen Chris Joye aside, The AFR has been a key conduit of the banking sector’s campaign against the Turnbull Government’s 0.06% levy on big bank liabilities. Since the policy was announced in the May Budget, The AFR has published reams of articles decrying the levy as either “populist”, “ill-conceived”, “inefficient”, or “incoherent”. Today’s

1

Banks need more mortgage re-prcing

From Morgan Stanley: ANZ lowers P+I rates by5bp, but lifts IOLrates by30bp: On Friday, ANZ announced a 5bp reduction in variable rates for principal and interest (P+I) loans and a 30bp increase for interest only loans (IOLs) “in response toregulatory and market conditions”. This means ANZ’s rate for OOL P+I loans will be the lowest