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.


Aussie John demands return to dodgy mortgages

It’s amazing that only six months after the Hayne Royal Commission exposed prolific criminality in mortgage standards that chief mortgage broker rentier, Aussie John Symond, has “urged the government to intervene to ease the pressure on banks over how stringently they must check customers’ living expenses”: [Symond is] pushing for regulators to take a more


Zombie APRA shuffles after revving housing Ferrari

It’s horrible to watch as APRA’s head zombie regulator, Wayne Byers, shuffles along after a revving house price Ferrari. Check out this brain eating garbage yesterday from the man that should have been unceremoniously sacked after the Hayne Royal Commission exposed total APRA failure in the mortgage and wider banking market: The Australian Prudential Regulation


Former CEO: Coalition killed the NBN

NBN Co’s founding CEO, Mike Quigley, claims the national broadbank network’s (NBN) viability has become diminished as a result of the changes implemented by the Coalition when it came to power in 2013. Quigley, who left NBN Co not long after the Coalition was elected, contends it has a fundamental problem in that it is


ASIC launches legal action against NAB for dodgy mortgage lending

Hot on the heels of losing its case against Westpac, the Australian Securities & Investments Commission (ASIC) has commenced legal action against NAB over alleged breaches of credit laws. Meanwhile, an accountant is seeking an explanation from NAB as to why it approved a $260,000 loan to her late partner despite the fact that he


Blame APRA not RBA for any property bubble reflation

UBS’ Jonathon Mott is freaking out a little declaring that RBA’s cure of rate cuts may be worse the housing correction “disease”: With interest rates now ultra-low, the ability of the banks to generate a lending spread and return on equity is very challenged. It is possible that RBA rate cuts could lead to a


Stop the Press: Bank doesn’t want profit-eating QE!

Hoocoodanode! At Domain: One of Australia’s top bankers has warned against using unconventional monetary policy in an attempt to boost the domestic economy, saying it could undermine international investor confidence and have a precipitous impact on bank profit margins. The chief executive of Westpac’s institutional bank, Lyn Cobley, also said she did not think even


Captured APRA declares war on RBNZ

You honestly would not read about it. Following the RBNZ marvelous and necessary move to lift bank capital ratios to something approximating safe, APRA has declared war upon it: The Australian Prudential Regulation Authority (APRA) has released a strengthened prudential standard aimed at mitigating contagion risk within banking groups. The updated Prudential Standard APS 222


Recessionberg undertakes bogus Hayne bank reform

Via the ABC: Treasurer Josh Frydenberg has revealed an “implementation road map” around the 54 recommendations from the financial services royal commission that called for Government action. The final report from commissioner Kenneth Hayne made 76 recommendations, 54 of which were directed at the Government, which has been accused of dragging its feet in response to the


Another APRA head goes as failed Byers hangs on

Via the AFR over the weekend: The Australian Prudential Regulation Authority is looking for a new head of policy and advice, following the resignation this week of Pat Brennan, who had responsibility for developing the regulator’s policies on banks, insurers and super funds. Mr Brennan’s surprise resignation after more than eight years at APRA creates


ANZ bad loans on the march

Via Martin North: ANZ today provided an update on credit quality, capital and Australian housing mortgage flows as part of the scheduled release of its Pillar 3 disclosure statement for quarter ending 30 June 2019 and associated chart pack. Given the strategy was to shed a portfolio of businesses and focus on the Australian retail market, we


Could the ASIC HEM failure tighten mortgage lending?

There is one reason to think so today, via AFR: Westpac Group is set to follow up its landmark victory against ASIC on responsible lending with sweeping changes to home lending policies that include more rigorous assessment, deep diving into household spending, and new debt-to-income analysis of higher-risk loans. The bank is also planning to


Mortgage arrears still climbing

Via S&P: Australian prime home-loan arrears remained steady in June, with the Standard & Poor’s Performance Index (SPIN) for Australian prime mortgages slipping 1 basis point to 1.51% from a month earlier. That’s according to S&P Global Ratings’ “RMBS Arrears Statistics: Australia,” published today. Arrears typically decline in June and throughout the third quarter. Mortgage


What does the HEM decision mean?

Via Martin North: The key question now is will the banks revert to their previous practices of doing little to validate household spending patterns as part of the mortgage assessment processes. Some are already saying “buy now” with renewed vigour. The Royal Commission revealed last year that some lenders ignored household expense data favouring the


Mortgage fraud game on? ASIC loses HEM case

Via the ABC: The Federal Court has dismissed ASIC’s responsible lending case against Westpac and ordered the regulator to pay the bank’s costs. ASIC had alleged that Westpac breached responsible lending laws on up to 262,000 home loan approvals made using an automated process that relied on the Household Expenditure Measure benchmark, rather than using


Aussie John demands MOAR

It’s all so predictable. Just months out from the prolific criminality exposed by the Hayne Royal Commission, the rentiers are back. Via the AFR: The founder of Aussie Home Loans, John Symond, says the housing market has turned a corner but both he and ANZ Banking chief Shayne Elliott believe that ‘over-regulation’ could threaten its


Is tightened credit behind the crash in new car sales?

Earlier this month, the Federal Chamber of Automotive Industries reported that annual new car sale had hit the lowest level since November 2012: Today, The AFR blames part of this decline on tightening automotive credit: In a post-royal commission world, where the banks are struggling to come to grips with what “responsible” lending really means,


It’s not a negative rate mortgage, it’s an Orwellian mortgage

Some brouhaha around this in Denmark: Jyske Realkredit is ready with a fixed-rate mortgage with a nominal interest rate of minus 0.5%. Yes, you read right. You can now get a fixed-rate mortgage with a maturity of up to 10 years, where the nominal interest rate is negative. However, you are not exactly going to make money


400k rorted Aussies mull suing Ken Henry’s NAB

Recall from last month: Slater and Gordon has widened its class action case against National Australia Bank to include people who were sold personal loan insurance. The firm’s class action issued in 2018 on the back of the Banking Royal Commission argues thousands of NAB customers were sold worthless credit card insurance they would never


Evil Anna pushes to restore mortgage fraud

She’s probably Australia worst public policy sell out. And she’s earning her $600k plus, via Banking Day: The Australian Banking Association is preparing to push back against ASIC’s plan to make responsible lending guidelines more prescriptive, and will argue for the maintenance of the principles-based approach when the regulator holds public hearings on the issue