Digital Finance Analytics (DFA) Blog
"Intelligent Insight"
Continuing our analysis of the FSI Report, we have been looking at comments and recommendations relating to SME’s. Australia’s SME’s are a critical though undervalued sector of the economy, accounting for some 3 million business, and 5 million jobs. We hoped there would be substantial focus on initiatives to kick-start this sector (given the growth … Continue reading “FSI – SME’s Little To Cheer About”
The FSI report discusses the alignment of consumer outcomes and financial advice firms, questions “general financial advice” and adviser qualification. The report recommends that the term “general advice” be changed to better reflect what is intended and that the financial adviser or mortgage broker should be required to clearly explain their association with the product … Continue reading “FSI – On Financial Advice”
In today’s FSI report, there is a strong focus on the capital buffers which banks need to hold. We had expected this development. Australia’s banking system is highly concentrated, with the four major banks using broadly similar business models and having large offshore funding exposures. This concentration exposes each individual bank to similar risks, such … Continue reading “FSI – Lift Capital Buffers”
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”
Sunday is D-day for the FSI inquiry. The Financial System Inquiry will establish a direction for the future of Australia’s financial system. The Inquiry will lay out a ‘blueprint’ for the financial system over the next decade. So in preparation, its worth reflecting on how we got to this point. The earlier Campbell inquiry in … Continue reading “FSI Countdown”
Having summarised the main observations from the 460 page Financial System Inquiry (FSI) interim report yesterday, today we start to delve more deeply into some of most important issues raised. In a number of areas, we believe the work to date could be sharpened. Lender’s Mortgage Insurance. The report rightly highlights that for banks with … Continue reading “Reflections On The FSI Interim Report – Part 1”
Moody says that on 23 September, German bank regulator Bundesanstalt fuer Finanzdienstleistungsaufsicht (BaFin) and the German central bank, the Deutsche Bundesbank, published the results of their biennial stress test applied to 1,412 small and midsize German banks that fall under BaFin’s direct oversight. The tested banks represent 38% of German banking system assets. The stress … Continue reading “German Bank Stress Test Hit By Low Interest Rates”
A new UBS report has said that regulators getting tougher on capital is a threat to dividends, particularly those of the major banks. Via InvestorDaily. UBS reported that it was cautious on the Australian big four banks as the low rates environment made it harder for the banks to generate a lending spread and challenged the … Continue reading “Bank Dividends Under Pressure”
On 27 May, Germany’s bank supervisor Bundesamt für Finanzdienstleistungsaufsicht (BaFin) published a recommendation of the national financial stability committee that would require banks to hold an additional 0.25% capital cushion against their domestic riskweighted assets (RWAs). At the same time, BaFin indicated its intention to follow this recommendation, which would become binding after a 12-month … Continue reading “Germany Increases Banks’ Countercyclical Buffer”