Digital Finance Analytics (DFA) Blog
"Intelligent Insight"
The MYEFO was released today. In essence, it has quite an optimistic tint, but fundamentally growth is too weak, so incomes, business investment and tax takes will be depressed. Whilst there is some chance of a “free-kick” from some commodity prices, the outlook is not great, and net government debt has yet to peak. The … Continue reading “MYEFO – Will Mortgage Rates Rise?”
During the GFC, a number of banks were bailed out to stop them failing using tax payer funds. Whilst the immediate crisis passed, there is still a residual level of support to banks, and an expectation that if they got into financial difficulty, they would be bailed out. This allows them to gain funding cost … Continue reading “The Hidden Costs Of Bank Support”
Moody’s says last Tuesday, German stock exchange gazette Börsen-Zeitung reported that Germany’s Ministry of Finance had proposed a draft law aimed at tightening residential mortgage lending market regulations. Once enacted, German Financial Services Authority BaFin would be authorised to tighten residential mortgage loan origination criteria to prevent house prices from overheating. This would be credit … Continue reading “Germany Tightens Residential Mortgage Lending”
We finish our series on mortgage stress by looking at TAS, and the region around Hobart. Using data from our surveys, 24.3% of households are currently in mortgage stress. This is above the national average of 21.3%. You can read about our methodology here. We assess individual household income and expenditure, and do not rely … Continue reading “The Top 10 Mortgage Stress Post Codes In The Hobart Region”
From The Conversation. Last month, the Federal Reserve announced that 31 out of 33 U.S. banks had passed its latest “stress test,” designed to ensure that the largest financial institutions have enough capital to withstand a severe economic shock. Passing the test amounts to being given a clean bill of health by the Fed. So … Continue reading “Fed’s focus on ‘too big to fail’ won’t save taxpayers from next bank bailout”
From The Conversation. Australia’s AAA credit rating was under pressure even before the election and is now looking decidedly shaky. Ratings agency Standard & Poors has moved Australia’s rating outlook from “stable” to “negative”, due to debt and a poor chance of budget repair. This follows warnings from the other major credit rating agencies – … Continue reading “Australia could be about to lose its AAA rating, and here’s why”
A speech by Professor John Iannis Mourmouras, Deputy Governor of the Bank of Greece, examines the impact of low and negative interest rates on economies. He starts by stating that this unconventional monetary policy is not temporary. Rates will be ultra low for a long time. As a result, bank profits will be eroded; financial … Continue reading “Five Critical Risks in an Era of Negative Interest Rates”
An article published today in the NZ Reserve Bank Bulletin explores the potential effects of digital disruption to banks and broader financial system stability. Consumers now expect the same seamless digital services from banks as they receive from other industries. Hence, the banking industry is being ‘digitally disrupted’ as banks and technology firms race to … Continue reading “RBNZ Does Digital Banking Disruption”
In a speech by Andrew Gracie, Executive Director of Resolution of the Bank of England, at the 21st Annual Risk USA Conference, he outlines some of the elements in the Too Big To Fail (TBTF) resolution agenda. The aim is to ensure that in the event that a global systemically important financial institution (G-SIFI) fails … Continue reading “Central Counterparties and the Too Big to Fail Agenda”
Fed Reserve Governor Lael Brainard speech “Dodd-Frank at Five: Looking Back and Looking Forward” provides an excellent summary of the state of play of US banking regulation. In short, much done, much still to do. If there is one simple lesson from the crisis that we all can embrace, it is that no financial institution … Continue reading “Dodd-Frank At Five”