Digital Finance Analytics (DFA) Blog
"Intelligent Insight"
The ECB’s quantitative easing programme is unlikely to materially boost eurozone banks’ earnings or kick-start lending in the bloc, Fitch Ratings says. But it does reduce downside risk from prolonged deflation. Any positive impact on banks is likely to be temporary unless their balance sheets are freed up for more lending or structural reforms raise … Continue reading “ECB’s QE Unlikely to Kick-Start Bank Loan Growth – Fitch”
In a speech in London entitled “Realigning private and public interests in wholesale financial markets: the Fair and Effective Markets Review” given by Andrew Hauser, Director of Markets Strategy, Bank of England, and head of the Fair and Effective Markets Review secretariat; there is an interesting description of why Wholesale Financial Markets became relatively under-regulated, … Continue reading “Wholesale Financial Market Reform”
The BIS also released a consultative paper which outlines the Basel Committee’s proposals to design a capital floor based on standardised, non-internal modelled approaches. The proposed floor would replace the existing transitional capital floor based on the Basel I framework. The floor will be based on revised standardised approaches for credit, market and operational risk, … Continue reading “Capital floors: The Design of a Framework Based on Standardised Approaches”
ASIC today released a class order to facilitate term deposits that are only breakable on 31 days’ notice. The Class Order [CO 14/1262] gives relief for 18 months to enable 31-day notice term deposits of up to five years to be given concessional regulatory treatment as basic deposit products under the Corporations Act (the Act). … Continue reading “ASIC Provides Relief for 31-day Notice Term Deposits”
RBA Assistant Governor (Financial Markets) Guy Debelle speaking at the 27th Australasian Finance and Banking Conference in Sydney on 16 December 2014 summarised the changes to bank liquidity which are translating to lower deposit rates for savers in 2015. We already highlighted the falling deposit rates for savers (despite no change in the RBA rate). … Continue reading “New Liquity Rules Will Reduce Deposit Rates Further”
David Murray’s Speech to the Committee for Economic Development of Australia ‘Supporting Australia’s Economic Growth‘ coincided with the release of the Final Report of the Financial System Inquiry. First let me thank CEDA for being our host, once again, as we release the Final Report of the Financial System Inquiry. I’d also like to recognise … Continue reading “FSI – David Murray’s Speech”
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”
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”
According to Fitch Ratings, the Australian Banks will be able to handle any potential increase in capital requirements, and would be credit positive for the banks. Australia’s Financial System Inquiry (FSI), due to report by end-2014, is likely to recommend higher capital requirements for the large banks, says Fitch Ratings. A higher capital charge and/or … Continue reading “Higher Capital for Big 4 Australian Banks Credit Positive – Fitch”