Digital Finance Analytics (DFA) Blog
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The Australian government’s acceptance of almost all of the recommendations of the Financial System Inquiry (FSI) will lead to a strengthening of the banking system with improved resiliency to shocks, says Fitch Ratings. The decision to back the recommendations reinforces Fitch’s view that bank capital requirements will rise in line with regulatory changes over the … Continue reading “Government’s FSI Support Will Strengthen Aussie Banks”
All but one of the Murray Financial Systems Inquiry have been accepted by the Government. The report, released today says that this is to ensure the Australian Financial Services system remains safe and secure. This is an important step forwards in the development of the finance sector, and to ensure the interests of consumers are … Continue reading “FSI Recommendations Backed By The Government”
In a speech given by Greg Medcraft, Chairman, Australian Securities and Investments Commission at the 32nd annual conference of the Banking and Financial Services Law Association (Brisbane), he looked at the Financial System Inquiry from a regulator’s perspective. Specifically, he sees three FSI recommendations as complementary. Product intervention powers would complement and reinforce the good … Continue reading “ASIC and FSI Outcomes”
APRA released their comparative capital study today. Overall, whilst it shows that on an international comparison basis Australian banks are well placed, they are not placed in the top quartile of their international peers, so confirms the observation made by the FSI Inquiry. For the purpose of this analysis, APRA has used the 75th percentile … Continue reading “APRA Confirms Banks Will Need More Capital To Achieve FSI Recommendations”
Glenn Stevens spoke at the Australian Financial Review Banking & Wealth Summit “Observations on the Financial System“. He included comments on the implications of the quest for yield on retirement incomes, financial services culture, and remarks on the FSI inquiry. The Inquiry has eschewed wholesale changes in favour of more incremental ones. I do not … Continue reading “RBA on FSI and Quest For Yield”
We discussed aspects of the FSI Report on the ABC Drum recently. You can view the programme via the ABC iView feature. Points we touched on included the changes to capital and the bank’s responses, why more capital is needed, financial adviser disclosure, regulatory frameworks and the need for cultural change.
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”
The final report of the Financial Systems Inquiry was released on Sunday. We already provided a summary of the 44 recommendations and discussed some of the specific proposals. It is of course a report to Government, so still a political process will run before we see what translates into policy, though some recommendations – for … Continue reading “Reflections on FSI”
The FSI report discussed the roles of APRA, RBA and ASIC, commenting that Australia’s institutional structure is relatively informal and decentralised.The most critical observation is implicitly that competitive tension has been traded away for in preference for financial stability. The acquisition of St George by Westpac, and Bank West by CBA would be two relative … Continue reading “FSI – Rebalance Regulatory Focus Towards Competition”
The FSI report recommends the removal of the exception to the general prohibition on direct borrowing for limited recourse borrowing arrangements by superannuation funds. This would stop property investments via SMSFs, a growing trend, or shares. Other than this, SMSF’s received an endorsement, as a legitimate savings vehicle for retirement (but not necessarily as a … Continue reading “FSI – SMSFs Banned From Leveraged Property Investment”