Digital Finance Analytics (DFA) Blog
"Intelligent Insight"
We have updated our savings intentions data, using results from our latest household surveys. Today we outline the main findings from the research. Using the DFA property segmentation, we can compare the relative value of savings across the segments, and compare this distribution with last year. In addition, we expect savings rates to be cut … Continue reading “Household Savings Intentions in 2015”
The Bank of England just released their latest Financial Stability report. Within the document there is a section on the implementation of macroprudential measures relating to mortgage lending. This makes an interesting contrast with the Australian Regulatory framework. Mortgage affordability test – Implemented: When assessing affordability, mortgage lenders should apply an interest rate stress test … Continue reading “UK Macroprudential Update”
Fresh on the heels of the FSI report, the core thesis of which is that the Australian Banks are too big to fail, so capital buffers must be increased to protect Australia from potential risks in a down turn (a “mild” crash could lead to the loss of 900,000 jobs and a $1-2 trillion or … Continue reading “Housing Finance Regulation – Tweaked, Not Reformed”
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”
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”
There is bad news for those households with bank deposits. We have already seem a range of deposit repricing initiates by the banks, as they trim their deposit rates. But it is likely to get worst, as international sources of funding get cheaper, and changes to capital requirements are likely to translate to further rate … Continue reading “Savers Are Going To Get Crunched”
Today, in a speech by Chris Aylmer, Head of Domestic Markets Department, RBA, we got an interesting summary of recent developments in the market. This is important, because as at June, the Bank held about $25 billion of these assets under repo as part of their liquidity management operations. In addition, at the same forum, … Continue reading “Australian Securitisation Under The Microscope”
Luci Ellis, Head of Financial Stability Department spoke to the Australian Housing and Urban Research Institute (AHURI) Panel Roundtable. You can hear her remarks, and a transcript is promised later. My notes follow. Cross country comparisons on housing markets are important, but sometimes comparisons need to be used with care, e.g. specific issues like overbuilding … Continue reading “House Prices Match Income Growth – RBA”
The Australian Prudential Regulation Authority (APRA) has published the opening statement given to the Senate Standing Committee on Economics by Wayne Byres today. He appears to deflect focus from macro prudential intervention. Recent comments in the Reserve Bank’s Financial Stability Review about emerging imbalances within the housing market, and the need to reinforce sound lending … Continue reading “APRA Hoses Down Macroprudential”
The ABS published their Retail Trade data for August. The seasonally adjusted estimate rose 0.1% in August 2014. This follows a rise of 0.4% in July 2014 and a rise of 0.6% in June 2014. In seasonally adjusted trend terms, Australian turnover rose 4.9% in August 2014 compared with August 2013. Most analysts were expecting … Continue reading “Retail Trade Turnover For August Only Slightly Up – ABS”