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.

37

APRA removes macroprudential the first

Via APRA: The 10 per cent benchmark on investor loan growth was a temporary measure, introduced in 2014 as part of a range of actions to reduce higher risk lending and improve practices. In recent years, authorised deposit-taking institutions (ADIs) have taken steps to improve the quality of lending, raise standards and increase capital resilience.

47

MB Fund webinar: Are the Banks Royally F***** ?

Are the Banks Royally F***** ? LIVE THIS THURSDAY 26th April, 12:30 PM (GMT + 11:00) Join David Llewellyn-Smith, Leith Van Onselen, Damien Klassen and Tim Fuller this Thursday as we embark on a deep dive into the latest hot topic, Royal Commission: – What will this mean for the banking sector in Australia? – What

36

Bob Katter moves Australian Glass-Steagall bill

Not unreasonable stuff from Bob Katter: Need for this bill It is obvious that Australia’s Big Four banks and Macquarie are devoted solely to their own usurious profits at the expense of the population as a whole. We must therefore break up these “vertically integrated”, self-centred and crime-ridden behemoths and return to the sort of

43

RBA crashes off interest-only mortgage cliff

Via Christopher Kent, Assistant Governor (Financial Markets): Introduction I’d like to thank the Housing Industry Association for the opportunity to speak to you about the role of interest-only loans. Mortgages on interest-only terms have become an increasingly prominent part of Australian housing finance over the past decade. At their recent peak, they accounted for almost 40 per cent

23

ANZ tightens income criteria for mortgages

Via the AFR: ANZ, the nation’s third largest mortgage lender, is boosting scrutiny of clients’ personal identity, income, qualifications and capacity to repay loans amid evidence of wide-scale identity theft. The bank, which is the most dependant of the major banks on brokers for distributing mortgages, is circulating “policy updates” about minimum evidence of borrowers’

23

Westpac: RBA won’t raise interest rates but we will

Via Bill Evans at Westpac: The minutes of the Reserve Bank’s Board meeting on April 3 contained a surprise in the final paragraph – “it was more likely that the next move in the cash rate would be up, rather than down”. We have seen the Governor make that statement in speeches but have not

50

Evil Anna confesses

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

90

Should Scott Morrison resign over royal commission?

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?

189

We are all the royal commission now

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

28

Jingle mail risks mount

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

43

Pollies cat fight over royal commission kudos

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

25

ME Bank “forced” to hike mortgage rates on “funding costs”

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

82

ABC’s The Business does rampant CBA, AMP corruption

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

37

Royal Commission should expose “paedophile priests” of finance

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

21

As banking standards collapse, a new lobby emerges

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

12

ANZ joins mortgage standards crunch

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

23

MB Radio: Australia’s hidden normal comes out

  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

136

Mortgage standards panic seeps into MSM

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,

11

Evil Anna upset by new bank regulation

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

44

More on Westpac’s new mortgage expenses crunch

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

111

Bubble trouble: Westpac tightens expenses-screening for mortgages

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

12

NAB shocked! Shocked! At new corruption allegations

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

12

Westpac: Housing starving small businesses of finance

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