Digital Finance Analytics (DFA) Blog
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Released by the Bank of England, “Don’t just do something, stand there”… (and think) was David Miles final speech as an external MPC member reflects on the past six years of low interest rates, the lessons we can take from the financial crisis and where monetary policy might go from here. In particular he discusses … Continue reading “Financial Stability and Monetary Policy”
From The Conversation. In a recent address to the Economic Society of Australia, the Reserve Bank Governor Glenn Stevens hit the nail on the head when he remarked that “monetary policy alone can’t deliver everything we need and expecting too much from it can lead, in time, to much bigger problems”. What was particularly important … Continue reading “When monetary policy reaches its limits, what of fiscal policy?”
The IMF released their Concluding Statement of the 2015 Article IV Mission today. Australians have enjoyed exceptionally strong income growth for the last couple of decades. But the waning of the resource investment boom and the recent sharp fall in the terms of trade have brought this to a halt. Incomes should start rising again … Continue reading “IMF Warning To Australia – Ambitious Reform Needed”
The RBA today published a paper on business investment decisions and their relationship to interest rate settings. They are clearly trying to understand why, when interest rates are in absolute terms low, business investment is still flat. Indeed in real terms, non-mining business investment in Australia has been little changed for several years. “Firms typically … Continue reading “Low Interest Rates Not Connected With Business Investment Decisions”
The latest minutes tells us little about future prospects for rate changes, the RBA is waiting to see what happens but with overall growth expectation weak. They recognise risks in the housing sector in some centres, but also see slow business investment and spare capacity in the system. Between a rock and a hard place! … Continue reading “RBA Minutes For June Meeting Released”
Glenn Stevens gave an address to the Economic Society of Australia in Brisbane where he discussed the need to align policy levers to drive growth and the limits of monetary policy. The latest edition of the Australian National Accounts, released last week, shows the picture. The quarterly growth figure was stronger than what had been … Continue reading “Aligning Growth Policy Levers”
The RBA released their board minutes from the Monetary Policy Meeting held earlier in May. They continue to balance generally weaker indicators with the risks of stoking the housing market in Sydney and Melbourne with a rate cut. They also agreed that, as at the time of the reduction in the cash rate in February, … Continue reading “Latest RBA Minutes Deliberately Gives No Forward Indication”
APRA’s Wayne Byres today spoke at the COBA CEO & Director Forum in Sydney. His speech was entitled ‘Sound lending standards and adequate capital: preconditions for long-term success’. He highlights some interesting behaviourial differences between banks when it comes to the appraisal of mortgage loans, and also talks (and reinforces APRA’s position) with regards to … Continue reading “APRA On Lending Standards And Capital”
The Australian economy is limping along – growing barely fast enough to absorb new workers, with interest rates at record lows, slow wage growth constraining household consumption, and investment relatively weak and declining due to weak business confidence according to Ross Guest Professor of Economics and National Senior Teaching Fellow at Griffith University in his … Continue reading “This Budget Won’t Fix Australia’s Limping Economy. It Shouldn’t Try – The Conversation”
The final Senate report into Affordable Housing was released today. The report is more than 450 pages long (including appendices), and the 40 recommendations cover a wide range of issues, including coordination and management across states and territories; developing a long term national plan; phasing out stamp duty; new funding options; urban planning; land supply; … Continue reading “Senate Delivers Final Affordable Housing Report”