# Maybe the RBA wants the banks to increase their rates?



## sptrawler (10 February 2012)

Who says the R.B.A don't want the banks to lift rates? Wayne Swann.LOL, LOL
If the R.B.A thinks the interest rates are low enough to curtail inflation, yet want more pressure put on the retail sector. What better way than having the banks lift their rates, it has the added benefit of improving the banks capital adequacy ratio.
Which will enable them to meet the basel 111 liquidity, it appears to be a no brainer to me and Swann is being a 'dick' as usual. trying to get cheap votes.
Time will tell, hower the last thing the R.B.A wants to see is headlines like this one.

http://smh.domain.com.au/real-estat...-home-sales-trend-upwards-20120206-1r0zy.html


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## YELNATS (10 February 2012)

I have a tricky dilemma on my hands.

I have existing variable rate loans on 2 properties.

I am borrowing a further $1 million to purchase a third property and I am fixing my bank loan (not from ANZ) at 5.99% for 3 years. However, the settlement date is next Friday February 17 and between now and then the bank could increase the fixed rate by up to 25 basis points. However, I can protect the 5.99% rate if I pay the bank a fee of $1500.

I am awaiting ANZ's decision today whether they will lift their rates.

What would you do in these circumstances?


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## YELNATS (10 February 2012)

News just to hand, ANZ raised variable rates by only 6 points.

I think I'll just sit tight, not a lot to worry about.:


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## sptrawler (10 February 2012)

Well the first move is always the hardest. I tend to think the R.B.A will use this as a opportunity to fine tune the economy.
Has to be better than up 6 down 4 ad nauseum.


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## sptrawler (10 February 2012)

It's also funny that they have removed exit fees, but who do you go to. C.B.A and N.A.B were the nasty banks last year. So you jump into A.N.Z and Westpac, pay establishment fees and whallah you are now hit with them putting up there rates.
Good on you Wayne, that fixed the banks, why can't you be honest and say if the banks make a skinny margin, they will go broke and we will go down the toilet.


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## sptrawler (10 February 2012)

This statement by Wayne today sums it up.

"The fact is that the major banks in this country are very profitable. Their net interest margins are back to where they were prior to the global financial crisis.'

"We do need a strong financial system, we do need profitable banks, but what we need here is competition."

What does that mean, it is o.k as long as they all do the same thing.


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## Starcraftmazter (12 February 2012)

It is not even true. The yields banks have had to pay on their covered bond issuances are more or less equal to the interest rates they charge on mortgages. Considering they also have to pay for staff, rents, maintenance, and actually make a profit - the banks are losing money on every new mortgage their write.

This comes in a year where the banks have to refinance the biggest amount of their foreign debts for several years to come or several years back - because all the money the banks borrowed during the GFC with the government's wholesale guarantee is due this year and has to be re-borrowed.

Unless the foreign lending markets improve significantly or our government guarantees their debt again, our banks are headed for a catastrophe as this year progresses. It doesn't even matter that credit growth is flat, unless they can re-finance their GFC borrowings they will have to get rid of a substantial portion of their current assets - and forget about any new lending.


For the record, I truly hope this happens so that Swan looks like the retard he is 



As for the RBA, Stevens has been doing a reasonably fine job of slowing deflating the housing bubble. I doubt it can be done for long - and at some point it will violently burst - but for the time being, the RBA is certainly not going to allow speculators to try and re-inflate it - hence their hold on rates and warning to potential home buyers.


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## Glen48 (12 February 2012)

The banks are equally guilty as the Fed's lending at  110%, loc doc loans. FHOB , knowing the tax payer will bail them out if all goes pear shape.
 So when it all tanks don't feel sorry for them and if you have shares in them good luck with that.


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## snowking (12 February 2012)

Glen48 said:


> The banks are equally guilty as the Fed's lending at  110%, loc doc loans. FHOB , knowing the tax payer will bail them out if all goes pear shape.
> So when it all tanks don't feel sorry for them and if you have shares in them good luck with that.




and whilst the banks want to increase interest rates to ensure they arent writing loans at a loss we have a moronic treasurer who calls them 'bastards' for increasing their standard rate by 6 basis points. The last covered bond issue by CBA was done at the BBSW plus 1.7%, they can't continue to lend at current rates whilst borrowing at close to 7%. Wayne Swan needs to be shot for the benefit of the country.


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## IFocus (12 February 2012)

snowking said:


> and whilst the banks want to increase interest rates to ensure they arent writing loans at a loss we have a moronic treasurer who calls them 'bastards' for increasing their standard rate by 6 basis points. The last covered bond issue by CBA was done at the BBSW plus 1.7%, they can't continue to lend at current rates whilst borrowing at close to 7%. Wayne Swan needs to be shot for the benefit of the country.




Aaahh how many bil did they make again......what competition forces would you like to nominate in the banking market?


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## Julia (12 February 2012)

IFocus said:


> Aaahh how many bil did they make again......what competition forces would you like to nominate in the banking market?



If you express the profit of the banks in ROE rather than dollar terms, it's nothing much at all.  So deceptive and manipulative to always talk in terms of "the billions the banks make".  Wayne Swan, in particular, is guilty of this sort of simplistic, populist nonsense.

The other rant he regularly does along similar lines is to suggest the government 'propped up the banks' during the GFC.  The banks, Mr Swan, paid the government handsomely for that government guarantee, something essentially put in place just to ensure public confidence.


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## sptrawler (12 February 2012)

Starcraftmazter said:


> It is not even true. The yields banks have had to pay on their covered bond issuances are more or less equal to the interest rates they charge on mortgages. Considering they also have to pay for staff, rents, maintenance, and actually make a profit - the banks are losing money on every new mortgage their write.
> 
> This comes in a year where the banks have to refinance the biggest amount of their foreign debts for several years to come or several years back - because all the money the banks borrowed during the GFC with the government's wholesale guarantee is due this year and has to be re-borrowed.
> 
> ...




Well put SCM, that is where I was coming from with the thread. The banks still have to be able to attract deposits and make a margin on lending.
I think the reserve bank is doing a terrific job, I think Swan is a 'dick' who would be served better by shutting up and letting people who know what they are doing, get on with the job.
He will be the first to $hit himself if people start jumping all over the place with their mortages. If instability breaks out in our banking sector, we will be all in trouble.


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## snowking (12 February 2012)

Julia said:


> If you express the profit of the banks in ROE rather than dollar terms, it's nothing much at all.  So deceptive and manipulative to always talk in terms of "the billions the banks make".  Wayne Swan, in particular, is guilty of this sort of simplistic, populist nonsense.
> 
> The other rant he regularly does along similar lines is to suggest the government 'propped up the banks' during the GFC.  The banks, Mr Swan, paid the government handsomely for that government guarantee, something essentially put in place just to ensure public confidence.




Expressing the profits in respect to ROA also highlights that the banks arent as profitable as our treasurer would try and have us believe. The four majors have an average ROA of 0.93% which compares to 1.25% for the five major Canadian banks, It is pointless comparing to European and American banks, which are still down the toilet following the GFC.

On another note. The more Swan gets stuck into the banks and reduces their ability to move interest rates independent of the RBA the less banks will be likely to lend. Surely that will restrict credit growth and result in more job cuts in the banks. Completely opposite of the governments objective to stimulate the economy and keep growth inline with government forecasts


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## sptrawler (13 February 2012)

Also along the same line a lot of super funds use the banks as a cornerstone to their investments.
If they a tied to the R.B.A trying to macro manage spending, the resultant drop in income via lower interest payments and lower dividends, will see an increase in pension welfare payments and lower super balances.
Like everyone is saying, if Swan can't get his head around the big picture, maybe he should just shut up.
When the crap hit the fan the government couldn't do enough to talk up the banks. I for one don't think the banks are in a position where they could take a g.f.c2 or a China slump.
Swan trying to make himself look like he is telling the banks what to do is just confusing the electorate. They are wondering , if he is such an idiot why doesn't he shut up. IMO


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## Glen48 (13 February 2012)

Propping up the banks with taxpayer funds and sending a message if you stuff up the feds will support you is not a good way run the country.
Money spent on housing is wasted  capital that should be used on business venture's that will create exports and make the country less dependent on China's coat tails.

We need to get rid of the idea housing is bullet proof and the only way to wealth creation.


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## Klogg (13 February 2012)

Glen48 said:


> Propping up the banks with taxpayer funds and sending a message if you stuff up the feds will support you is not a good way run the country.
> Money spent on housing is wasted  capital that should be used on business venture's that will create exports and make the country less dependent on China's coat tails.
> 
> We need to get rid of the idea housing is bullet proof and the only way to wealth creation.




100% agree with you there - the problem is, how do we slowly deflate the housing prices so we don't shoot ourselves in the foot? And once the problem is solved, how do we stop them inflating at prices that we've seen in the last 20years?

And it's beyond me how housing even became such a 'safe' investment class when it usually only returns about 4%! (Sometimes more, but not often)


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## Starcraftmazter (13 February 2012)

Klogg said:


> 100% agree with you there - the problem is, how do we slowly deflate the housing prices so we don't shoot ourselves in the foot?




Impossible I say. Good riddance to bad bubble.



Klogg said:


> And once the problem is solved, how do we stop them inflating at prices that we've seen in the last 20years?




That part is easy - *extensive* land, tax and rental reforms. Make it impossible to speculate on property - like in Germany. 

Easy for a competent government I forgot to add.


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## Klogg (13 February 2012)

Good riddance to a bad bubble indeed, but if you just pop it, the country is really going to feel the effects... 

As for the extensive land solution - there's only so much land within the (for example) Melbourne metropolitan area... How does one ensure that the demand for this doesn't raise prices, regardless of any reforms that are done?
(I'm not sure what's been done in Germany though - some bed-time reading for me)

Finally, the tax and rental reforms you propose are likely to be ignored by government because there's too much at stake for them. They'd lose millions, possibly billions in taxes that are paid through the current structure.


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## Starcraftmazter (13 February 2012)

Klogg said:


> Good riddance to a bad bubble indeed, but if you just pop it, the country is really going to feel the effects...




Buddy, it's going to happen sooner or later - but the longer we put it off, the worse the effects will be.



Klogg said:


> As for the extensive land solution - there's only so much land within the (for example) Melbourne metropolitan area... How does one ensure that the demand for this doesn't raise prices, regardless of any reforms that are done?
> (I'm not sure what's been done in Germany though - some bed-time reading for me)




Why do you refer to one particular area? It's very simple - let the market do it's job. If people are willing to live in more dense living, then build taller apartment complexes in the CBD. If people are willing to travel further to work, then build houses further outwards. Overall, so long as developers have a right to grab land and develop it very very quickly, demand shocks will never translate through to price rises.

I am also referring to the overall national medials - not the prices in one small confined area.

In Germany, it is constitutionally forbidden for any level of government to block land development, so unlike here, there are no bureaucratic hurdles or backroom deals a developer needs to get through to develop land - they simply go ahead and do it. And there is plenty of housing supply for everyone, of the type that everyone wants, anywhere they want.




Klogg said:


> Finally, the tax and rental reforms you propose are likely to be ignored by government because there's too much at stake for them. They'd lose millions, possibly billions in taxes that are paid through the current structure.




Yes, those verminous parasites. Of course economically (and not to mention socially) the cost of land and house bubbles far far far exceeds these meagre rents which they collect. But of course, our ****ty governments - all levels and all parties just don't give a damn about our country.


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## sptrawler (13 February 2012)

Klogg said:


> Finally, the tax and rental reforms you propose are likely to be ignored by government because there's too much at stake for them. They'd lose millions, possibly billions in taxes that are paid through the current structure.




The government loose money on negative gearing, but they feel that is better than loosing their pension if they get thrown out.
They have to stop property speculation, the only way it can be done is by removing the tax advantage. They just have to bite the bullet, so it hurts property speculators.
It didn't seem to bother them who they hurt bringing in the carbon tax.


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## Julia (13 February 2012)

Glen48 said:


> Propping up the banks with taxpayer funds and sending a message if you stuff up the feds will support you is not a good way run the country.



No taxpayer funds were used to prop up any of our banks at all.
This is exactly the sort of misconception now held by many due to Mr Swan's disingenuous remarks.


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## Starcraftmazter (13 February 2012)

Julia said:


> No taxpayer funds were used to prop up any of our banks at all.




This is extremely false for two primary reasons;

1. The First Home Owners Boost (payed for by taxpayers) was used directly to prop up our banks' asset quality and increase credit growth which directly benefited bank profits.

2. The Federal Government's wholesale debt guarantee for the banks put the risk on bank borrowing in the hands of the taxpayer - as all of us were liable for hundreds of billions of dollars of debt which the banks borrowed with the guarantee of us paying it back for them - should they fail to do so. This was a particularly risky exercise as this debt was used to further finance the biggest housing bubble in the entire world.


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## Klogg (13 February 2012)

Starcraftmazter said:


> This is extremely false for two primary reasons;
> 
> 1. The First Home Owners Boost (payed for by taxpayers) was used directly to prop up our banks' asset quality and increase credit growth which directly benefited bank profits.
> 
> 2. The Federal Government's wholesale debt guarantee for the banks put the risk on bank borrowing in the hands of the taxpayer - as all of us were liable for hundreds of billions of dollars of debt which the banks borrowed with the guarantee of us paying it back for them - should they fail to do so. This was a particularly risky exercise as this debt was used to further finance the biggest housing bubble in the entire world.




The FHB grant simply raised the value of the assets - they didn't go to the banks, although the banks did benefit from this indirectly.

As for point 2, while it was highly unlikely that the guarantee would be put to use, the taxpayer was indeed liable for a period of time. Nevertheless, it was still a good move from a confidence point of view AND because an economically strong country needs strong banks.

The world's biggest housing bubble though... we're a little far from that. I'd say there are S/E Asian countries that beat us easily on that front.


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## Starcraftmazter (13 February 2012)

Klogg said:


> The FHB grant simply raised the value of the assets - they didn't go to the banks, although the banks did benefit from this indirectly.




Yes it did - the money used to buy properties with comes from somewhere. And the interest to service that money has to go somewhere too....

This is however just one aspect of it. If the FHOB bailout did not happen, the housing bubble would have headed for a more violent burst, and the arrears along with plummeting assets would ruin the banks. It was in every sense money gone directly to the banks for the benefit of the banks - a true banking bailout.



Klogg said:


> As for point 2, while it was highly unlikely that the guarantee would be put to use, the taxpayer was indeed liable for a period of time.




We are still liable - not all of those loans have ended their terms yet!



Klogg said:


> Nevertheless, it was still a good move from a confidence point of view AND because an economically strong country needs strong banks.




Yes, banks so strong they need the government to bail them out!



Klogg said:


> The world's biggest housing bubble though... we're a little far from that. I'd say there are S/E Asian countries that beat us easily on that front.




Which and by how much? Australian property was overpriced by 270% at bubble peak over around 20 years. I challenge you to find a bigger bubble in property.


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## Glen48 (13 February 2012)

Australian property is ober priced by 53% according to some  expert. 
Two of the banks had to  borrow money under TARP to stay afloat and the taxpayers are  or will be on the hook which meant the banks can do what they like and none they can be saved if they make the wrong decision.


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## sptrawler (13 February 2012)

This article explains it quite well.

http://www.theage.com.au/business/banks-rate-moves-reveal-system-cracks-20120213-1t0ce.html
The banks have to fatten up their balance sheets to absorb the drop in real estate prices. I would be very suprised if the RBA isn't working with them through the current situation.
The last thing the RBA wants is more house price rises, that includes freeing up more money for consumers to spend on retail and its flow on effect.
At the moment people are paying down debt, which is exactly what the RBA want, it reduces the banks exposure.
By allowing them to raise the gap between their funding and lending will accelerate the improvement in the balance sheet.
If it goes 'pop' like Glen says, we are all in the manure, it won't matter where you have your money.


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## Julia (13 February 2012)

Klogg said:


> As for point 2, while it was highly unlikely that the guarantee would be put to use, the taxpayer was indeed liable for a period of time. Nevertheless, it was still a good move from a confidence point of view AND because an economically strong country needs strong banks.



Exactly.  Potential liability during that time is quite different from suggesting the banks were actually 'bailed out' by taxpayer funds, a fallacy that continues to be promoted.


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## Glen48 (13 February 2012)

From Money Morning:

_The Aussie government's money managers, the Australian Office of Financial Management (AOFM) already owns $14.6 billion of residential mortgage-back securities (RMBS).__This is part of the program to increase competition in the Aussie mortgage market. Trouble is, it has been a total failure. The four major Aussie banks are more powerful than they've been for 30 years.

A tiny $14.6 billion won't change anything. The reason is, because like most government programs, it targets the symptom not the cause._Niice support from hard working Aussies.

If banks are rasing their rates it shows they are calling the shots and having to work in with the global markets.

The RBA doesn't matter any more.


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## Starcraftmazter (13 February 2012)

sptrawler said:


> If it goes 'pop' like Glen says, we are all in the manure, it won't matter where you have your money.




Unless it's in gold 




Julia said:


> Exactly.  Potential liability during that time is quite different from suggesting the banks were actually 'bailed out' by taxpayer funds, a fallacy that continues to be promoted.




Selective much? Back to point 1, the FHOB is a direct bailout to the banks, and the wholesale guarantee is a massive moral hazard. Like it or not, the banks *were bailed out by you*. And now the country is in debt because of it - and it's your responsibility to pay that debt back.


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## Glen48 (13 February 2012)

So Julia open your hand bag and bail out the nation.
May even get a Knight hood.
 We  are going to go the same way as USA only worse it will just take a bit more time.


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## Klogg (13 February 2012)

Glen48 said:


> So Julia open your hand bag and bail out the nation.
> May even get a Knight hood.
> We  are going to go the same way as USA only worse it will just take a bit more time.




Not quite... our financial institutions are far better regulated and much better positioned to handle any downturn. That's not to say they're immune, but it'd take a fairly big event for any US style property crash to occur (like the collapse of Lehmann brothers!).

That being said, I still believe there is a correction of sorts to be had.


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## sptrawler (13 February 2012)

Klogg said:


> Not quite... our financial institutions are far better regulated and much better positioned to handle any downturn. That's not to say they're immune, but it'd take a fairly big event for any US style property crash to occur (like the collapse of Lehmann brothers!).
> 
> That being said, I still believe there is a correction of sorts to be had.




I don't want to be a prophet of doom, however the statement that we are in a better position to take a downturn is erroneous, our banks have a capital adequacy ratio of 10% I think I have read.
So for every $10 in they lend $100 out, doesn't sound too bouyant to me. Just hope China keeps its nerve.LOL,LOL
But I do own bank shares, my reasoning if they go down, you've all lost your money.LOL


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## Klogg (13 February 2012)

sptrawler said:


> I don't want to be a prophet of doom, however the statement that we are in a better position to take a downturn is erroneous, our banks have a capital adequacy ratio of 10% I think I have read.
> So for every $10 in they lend $100 out, doesn't sound too bouyant to me. Just hope China keeps its nerve.LOL,LOL
> But I do own bank shares, my reasoning if they go down, you've all lost your money.LOL




You're right sptrawler, it is approximately 10%... However, it's not the capital requirements but the spreading (is that the correct term) of risk that is managed much better. At least that's my understanding, but I can't say I'm an expert on this by any means...

Would love to hear from someone who knows more on the topic!


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## Starcraftmazter (13 February 2012)

Klogg said:


> Not quite... our financial institutions are far better regulated and much better positioned to handle any downturn.




Yes, thank you Mr. Swan, Mr. News Ltd and Mr Fairfax.

That is nothing but a load of crap. Our banks are rubbish, ASIC and APRA are worthless at doing anything other than covering up our banks' foreign liabilities, their balance sheets consist of hugely overvalued property and their incompetence has led them to borrow countless billions of dollars at rates above what they give on term deposits.

If they didn't get bailed out by the taxpayers during the GFC and have their debt guaranteed by the taxpayer - they would be dead. Our banks are some of the worst capitalised in the world. Swan begged his colleagues at the Basel 3 conference to give our banks extra time to meet the new capital requirements, and they are pushing against them still.




Klogg said:


> That's not to say they're immune, but it'd take a fairly big event for any US style property crash to occur (like the collapse of Lehmann brothers!).




Not really, all bubbles burst - this is a fact of economics. Over half of all IPs belong to boomers, 2/3 of which are negatively geared. What happens as they begin to retire do you think? This is but one of the countless problems facing our housing market. Another is the oversupply that exists in many parts of the country due to bubble mechanics. Melbourne for instance.

And even though Sydney may not have a drastic oversupply, just wait until the tens if not hundreds of thousands of foreign speculators sell their IPs. The bigger they are, the harder they fall.

That being said, there are plenty of big events on the horizon; like the Greek default and the hard landing in China. 



Klogg said:


> However, it's not the capital requirements but the spreading (is that the correct term) of risk that is managed much better.




How is it managed better, they have around a Trillion $ of mortgage debt on their balance sheets, against which they have liabilities. When property prices crash by 60%, inevitably the taxpayer will be forced to bail them out, shifting our private debt - the second highest in the entire world (very close to the first!) onto our public balance sheet, and giving us a nice government debt to GDP of over 100%. And that's not even counting state debt!

So how are they better spread?


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## sptrawler (13 February 2012)

And that is why. 
Don't buy propery on the tick, and if you do buy property make sure it is one you may want to live in yourself and it returns a decent income.
Because if you are left with it, you want to be sure it is something you want.


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## Klogg (13 February 2012)

Starcraftmazter said:


> Yes, thank you Mr. Swan, Mr. News Ltd and Mr Fairfax.
> 
> That is nothing but a load of crap. Our banks are rubbish, ASIC and APRA are worthless at doing anything other than covering up our banks' foreign liabilities, their balance sheets consist of hugely overvalued property and their incompetence has led them to borrow countless billions of dollars at rates above what they give on term deposits.
> 
> ...




As I said, this is what I've heard on the subject and would like to hear from someone who has an intimate knowledge of risk and how each financial institution handles it - I'll have to do my homework to check this out in more detail...

And I know that this isn't much to go by, but I know the ratings agencies (yes, the same ones that failed in the GFC) "recently rated [the Australian banks] as one of the highest in the world."

Sourced from here:
http://www.bankers.asn.au/Default.aspx?ArticleID=587

And on the topic of capitalization, there's a few figures there that show Australian banks are somewhat better capitalized than their international counterparts (Figure 3).

I realize the bias in some of these arguments, as the source is the Australian Bankers Association, but it seems to match other stats I've looked up.

Finally, as for the spread of risk, that was something I read in recent regulatory documentation from APRA (Currently contracting @ NAB IT dept), but I can't qualify it with some documentation or figures, so feel free to disregard.

And I should probably make my position clear that I do view property as over-valued with characteristics that match what is defined as a 'bubble' - I'm just doubting that it'll pop in the near future...


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## Glen48 (14 February 2012)

If all the other banks around the world had or have been bailed out or distorted my management they is no reason why OZ banks shud be different.
 Stay by for the crunch.


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## Starcraftmazter (14 February 2012)

Klogg said:


> And I know that this isn't much to go by, but I know the ratings agencies (yes, the same ones that failed in the GFC) "recently rated [the Australian banks] as one of the highest in the world."




Honestly, it's not much to say one piece of crap smells a bit better than another piece of crap. Rating agencies are extremely reactive when it comes to these sorts of things, they will generally not downgrade something until the market has already done that itself with CDS prices. That being said, I do not recall our banks getting the title of best in the world.

The rating agencies have however said multiple things recently;
 - It is common knowledge that our banks are implicitly guaranteed by the taxpayer, which adds 2-3 notches to their credit rating

 - There is a significant risk to our banking system from foreign credit

 - Our property is overpriced and needs to come down to alleviate asset quality risks



Klogg said:


> Sourced from here:
> http://www.bankers.asn.au/Default.aspx?ArticleID=587




Buddy, this factsheet is from 7 years ago, and some of the figures it cites are from as far back as 11 years ago.



Klogg said:


> I'm just doubting that it'll pop in the near future...




It's already began....


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## Klogg (14 February 2012)

Starcraftmazter said:


> Buddy, this factsheet is from 7 years ago, and some of the figures it cites are from as far back as 11 years ago.




Yeah I realize that, but I don't recall any changes to the capitalization requirements of Australian banks since then - do you?

As for the bubble already popping... I personally can't see any solid evidence of this All I've seen so far is the normal boom/bust cycle that has come to be the normal in Australian property.

Remember, the same noise was being made in late '08 and a small increase to the FHBG caused property prices to go stupid.


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## Starcraftmazter (14 February 2012)

Klogg said:


> Yeah I realize that, but I don't recall any changes to the capitalization requirements of Australian banks since then - do you?




For ours and the rest - they changed with Basel 3.



Klogg said:


> As for the bubble already popping... I personally can't see any solid evidence of this All I've seen so far is the normal boom/bust cycle that has come to be the normal in Australian property.




Yes, and a bust is a pop is it not? Also, just because it has been "normal" does not make it good or safe to ignore. The current boom has been many orders of magnitude bigger than past ones, and as such so will the bust.



Klogg said:


> Remember, the same noise was being made in late '08 and a small increase to the FHBG caused property prices to go stupid.




And yet after a massive amount of taxpayer money was malinvested into this bubble, property prices are again below GFC peak and falling fast. In fact, we have now had more months of falling prices than the GFC.


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## Klogg (14 February 2012)

Starcraftmazter said:


> For ours and the rest - they changed with Basel 3.




If that is the case, I stand corrected.


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## joea (14 February 2012)

Hi.
Well its not real hard to work out is it.
If interest rates are to be reduced, the banks will absorb a little.(at some time)
Because the big 4 were under pressure from Swan they passed on the the first two reductions.
Because the 3rd reduction was a non event. The banks are thinking, ok we did our bit before Christmas, but we think Swan talks with a forked tongue.
So they made a small adjustment, as good CEO's do.
Well I know one thing, and that is Swan or Gillard will not be invited to any B-B-Q's that the big 4 put up.
It will not be long before Swan really looses it with frothing at the mouth and the "chicken dance"  in question time.
joea . I love politics! Actually a couple of my mates reckon I am a stirrer.


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## Julia (14 February 2012)

I see the small rise in rates by the banks as being as much a political statement as anything, i.e. telling Wayne Swan to stop his stupid political interference in their business.

They can claim every justification for the move, given the RBA's support of their assertion re higher funding costs.

There's nothing Swannie can say except continue to splutter about their 'obscene profits'.


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## Starcraftmazter (15 February 2012)

Klogg said:


> If that is the case, I stand corrected.




Furthermore, the myth of Australian banks being well capitalised - fresh off the MB press just today!

http://www.youtube.com/watch?v=baBokhvOvUA

As you can see, *our banks are dangerously undercapitalised* as they manipulated the figures during the best times of the bubble boom and rising house prices, while mortgage insurance will have zero effect in any actual bust.

From:
http://www.macrobusiness.com.au/2012/02/too-big-to-fail-act-2/


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## sptrawler (17 February 2012)

Well at last the banks are telling Wayne Swan to shut up, about time.
As SCM says they are realy undercapitalised. The banks make say $10B profit, but that is on a property exposure of $1trillion, then there is business loans on top of that. Christ what do you expect them to make with that much investment a couple of grand. 
Swan needs to get a grip and realise what would happen if the banks were only making $1B profit, They would be insolvent. What a dick. 

http://www.smh.com.au/business/anz-chief-calls-for-end-to-bank-bashing-20120217-1td2k.html

 Hope they mention it on the evening news, but I doubt it.  They only seem to do that when anybody or their dog is bagging Abbott.

The profit figures mentioned were only meant to be an example, not necessarily acurate.


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## sptrawler (22 February 2012)

Well suprise suprise, the RBA said yesterday, they agreed with the the banks lifting their interest rates. 
Makes Swan and gillard look like stupid,with all their ranting.IMO


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## Glen48 (22 February 2012)

Banks want to lift rates to attract depositor's and stay afloat , Stevens and Swam want the get rates down to attract home owners and stop the housing market tanking .. who will will ?
The banks I would say


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## sptrawler (22 February 2012)

Glen48 said:


> Banks want to lift rates to attract depositor's and stay afloat , Stevens and Swam want the get rates down to attract home owners and stop the housing market tanking .. who will will ?
> The banks I would say




+1 Glen and I think the RBA agree with you.


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## Starcraftmazter (22 February 2012)

The RBA and the banks are not against each other - they are all banks, and they all have fairly common interests.

The RBA under Stevens does not want the housing bubble inflated any further - this much has been made clear over the past year. This is irrelevant to the banks' funding costs, but the RBA will not ever badmouth the banks.


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## Uncle Festivus (14 April 2012)

Here we go again?

From next Friday ANZ will lift its standard variable mortgage by six basis points to 7.42 per cent per annum.
Its interest rates for business customers will also rise by the same amount.
It is the second time this year the bank has raised its lending rates despite the Reserve Bank leaving the cash rate unchanged.
ANZ says it had to make the move because of rising costs.


Story


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## joea (14 April 2012)

Well I think Swan advised the banks to pass on all the rate decrease prior to last Christmas last year, and suggested there would be another decrease in the new year.
The decrease did not come!
The banks are now waving a red flag at Stevens and the RBA.
And we have this thing called the unemployment figure of 5.3% which is just a joke.
So when the shadow boxing folds, we will see the rate figure go in the correct direction.

If Swan wants to live in a ivory tower that is disconnected to real Australia, the let me know! I know the answer.
Paul Howes is spot on!!
0.5% would suit the Australian economy. But then I have been wrong before.
joea


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