Digital Finance Analytics (DFA) Blog
"Intelligent Insight"
The warning signs are ‘flashing amber’ on a credit crisis in China as the authorities stamp down on excessive lending, says Spectrum Asset Management; via InvestorDaily. Credit-focused Spectrum Asset Management has issued a note titled Our double Minsky risk that focuses on the likelihood of a credit crisis playing out in China and Australia. Spectrum … Continue reading “Chinese ‘Minsky moment’ looming: Spectrum”
China’s two recent reserve requirement ratio (RRR) cuts amid slowing economic growth and rising trade risks have prompted market speculation that a new cycle of monetary easing is underway, but Fitch Ratings believes it is too early to conclude recent policy actions mark a clear reversion in stance. A return to policy settings that add … Continue reading “Too Soon to Call China’s RRR Cut a Clear Sign of Easing”
Fitch Ratings says that China’s tightened regulatory stance has slowed the build-up in financial-sector risks and should help improve the financial system’s overall stability. However, Fitch Ratings does not believe these measures have reduced risks meaningfully enough to warrant the type of sector-wide bank rating upgrades recently made by Moody’s. The authorities have also not … Continue reading “China Bank Reform Positive But Too Soon for Mass Upgrades”
The cut in China’s required reserve ratio (RRR) is an example of the authorities using its array of policy tools to guard against liquidity shortages, particularly in prioritised sectors, as it continues its efforts to contain financial risks, says Fitch Ratings. We continue to believe the authorities’ commitment to tackling risks could be tested if … Continue reading “China RRR Cut Supports Bank Liquidity, Not Stance Change”
Vice-President of the Deutsche Bundesbank Prof. Claudia Buch spoke on “Have the main advanced economies become more resilient to real and financial shocks? and makes three telling points. First, favorable economic prospects may lead to an underestimation of risks to financial stability. Second resilience should be assessed against the ability of the financial system to … Continue reading “Advanced Economies and Financial Shocks”
From The Conversation. The Chinese government has appointed a new head of its central bank. Yi Gang, currently the deputy governor of the People’s Bank of China, will take over the leadership from Zhou Xiaochuan, who had been in the position since 2002. As China’s central bank oversees the stability of the world’s second-largest economy … Continue reading “China’s new central bank governor will have to deal with massive debt and an ambitious economic agenda”
27 Dec 2014 – Australian Financial Review – Analysts warn savers may face further pressure in 2015 23 Dec 2014 – ABC Online – BIS outlines higher capital requirements for banks 08 Dec 2014 – ABC The Drum – Financial System Review 07 Dec 2014 – ABC Radio – Expectations of the Financial System Review … Continue reading “2014”
From Moody’s. Last Friday, the China Banking Regulatory Commission published for public comment a draft regulation of commercial banks’ large exposure management in accordance with the Basel Committee on Banking Supervision’s framework. The draft regulation is credit positive for banks because it will quantifiably curtail the shadow-banking practice of investing in structured products without risk-managing … Continue reading “China implements Basel Committee framework for controlling large exposures, curtailing bank risk”
The RBA published the minutes of their last meeting, when the cash rate was held, once again. There is a little more colour in their comments, but nothing has substantially changed in that where the labour market, wage and inflation trends will set their policy direction in 2018. Once again, they mention the medium-term risks … Continue reading “RBA Warns On Household Risks”
Wayne Byers, APRA Chairman spoke at the Australian Securitisation Forum 2017. Household debt is high, and continues to rise. There are a three interesting observations within his speech about the risks in the mortgage system, despite their recent interventions. First, the trend in non-performing housing loans is upward, despite a relatively benign environment for lenders. … Continue reading “APRA On Housing – Risks Lurking Beneath”