Digital Finance Analytics (DFA) Blog
"Intelligent Insight"
From The Conversation: The Greek people have voted, saying a resounding No to the terms of the bailout deal offered by their international creditors. What will this mean for Greece, the euro and the future of the EU? Our experts explain what happens next. Costas Milas, Professor of Finance, University of Liverpool Greek voters have … Continue reading “Greece votes No: experts respond”
From The Conversation. Since our last episode, the crisis in Greece has escalated further. Negotiations between the government and its creditors collapsed over the weekend, and restrictions on bank withdrawals will now follow. The next step is for the government to issue the equivalent of IOUs to pay salaries and pensions. The country is seemingly … Continue reading “Path to Grexit tragedy paved by political incompetence”
The RBA published a Research Discussion Paper “Stress Testing the Australian Household Sector Using the HILDA Survey”. They use data from the Household, Income and Labour Dynamics in Australia (HILDA) Survey to quantify the household sector’s financial resilience to macroeconomic shocks. Given high household indebtedness, large mortgages and high house prices, estimating the potential impact … Continue reading “Stress Testing Households – RBA Paper”
Regulators have been concerned about the quality of lending, and have been increasing their supervision, conscious of the potential impact on financial stability. However, a paper from the Bank for International Settlements – Bank Competition and Credit Booms highlight that especially when interest rates are low, and competition intense, banks will naturally and logically drop … Continue reading “Risky Lending In A Low Interest Rate Competitive Environment”
The final FSI report is out, a 350 page document making 44 core recommendations. They received over 6.800 submissions and met more than 50 financial institutions as part of international consultations. “Australia’s financial system has performed well since the Wallis Inquiry and has many strong characteristics. It also has a number of weaknesses: taxation and … Continue reading “FSI Report Out”
The G20 Brisbane communique included a paragraph on financial stability reform, and refers specifically to the Financial Stability Review proposals to strengthen capital requirements for globally significantly banks. Strengthening the resilience of the global economy and stability of the financial system are crucial to sustaining growth and development. We have delivered key aspects of the … Continue reading “G20 On Financial Reform”
The RBA today published a paper on “Mortgage-related Financial Difficulties: Evidence from Australian Micro-level Data.” Although default rates in Australia are lower than in many other countries, their research paper delved into the different types of mortgage lending, using loan-level pool data provided by MARQ Services and concluded that higher LVR lending, and interest only … Continue reading “High LVR Lending More Risky – RBA”