Digital Finance Analytics (DFA) Blog
"Intelligent Insight"
Yesterday we ran a live discussion on our revised property and finance scenarios. For those who need to “answers” this is a brief overview. We explain more about our thoughts in the full show (below). Scenarios are a way of exploring different futures, and to consider the consequences, not as a forecast, but to facilitate … Continue reading “Updated Finance And Property Scenarios (Summary Findings)”
The Bank of England release their Financial Stability Report today, which includes the results of recent stress tests. Though the stress tests show that UK Banks could handle the potential losses in the extreme scenarios, the FPC is raising the UK counter cyclical buffer rate from 0.5% to 1% with binding effect from 28 November … Continue reading “UK Lifts Counter Cyclical Buffer”
We have been busy adding in new functionality to our Core Market Model, which is our proprietary tool, drawing data from our surveys and other public and private data sources to model and analyse household finances. We measure mortgage stress on a cash flow basis – the October data will be out next week – … Continue reading “Getting Deep and Dirty On Mortgage Risk”
Fintech Trade Ledger, claimed as the world’s first open digital banking platform has been launched, offering a complete platform-as-a-service for business lenders. The platform, they say, will help banks assess business lending risk in real time and will so address the US$1.7 trillion global under-supply in trade finance lending, thus providing high-growth companies with much-needed … Continue reading “Fintech startup, Trade Ledger, launches world-first tech to help banks fight off global tech giants”
From The IMFBlog. Whilst increased household debt gives an economy a boost in the short term, the IMF has found it creates greater risk 3-5 years later, lifting the potential for a financial crisis, as household struggle to repay. Given the ultra-high debt levels in Australia, this is an important observation. Debt greases the wheels … Continue reading “Rising Household Debt: What It Means for Growth and Stability”
The NZ Reserve Bank has released its consultation paper on possible DTI restrictions. The 36+ page report is worth reading as it sets out the risks ensuring from high risk lending, leveraging experience from countries such as Ireland. Interestingly they build a cost benefit analysis, trading off a reduction in the costs of a housing … Continue reading “NZ Reserve Bank Consults On DTI Restrictions”
The latest employment data from the ABS does not look too bad on first blush, it beat expectations, especially if you go for the wobbly seasonally adjusted series. However the continued rise in part-time employment (up 3.6%) compared with full-time (up 0.1%) highlights the problem with low take home pay, and when added to the … Continue reading “Unemployment Rate at 5.8 per cent for the Fourth Consecutive Month”
The latest edition of our weekly summary of events in the finance and property industry has been released, a week in which the RBA told us more about household finances, major banks reported lifts in delinquencies and the number of households in mortgage stress continued to rise. You can watch our video summary. We start … Continue reading “The Property Imperative Weekly 6th May 2017”
We have highlighted the rise in mortgage stress. We identified rising mortgage rates, underemployment, higher costs of living and flat incomes as causes of stress. But we need to stop and ask how come more households are under mortgage pressure than ever? After all, lenders should have been operating with at least a 2.5% buffer … Continue reading “The Affordability Conundrum”
Following the initial release yesterday, and the coverage in the AFR, today we drill down further into the latest mortgage stress results. By way of background, we have been tracking stress for years, and in 2014 we set out the approach we use. Other than increasing the sample, and getting more granular on household finance, … Continue reading “What The Mortgage Stress Data Tells Us”