ASIC says “You could have a share in $1.1 billion of unclaimed money”

The Australian Securities and Investments Commission (ASIC) is urging Australians to do a quick and free search on ASIC’s MoneySmart website to see if a share of $1.1 billion of unclaimed money is theirs.

‘There are more than a million records of unclaimed money from dormant bank accounts, life insurance, shares and other investments waiting to be claimed and we’re keen to reunite people with their money’, said Peter Kell, ASIC’s Deputy Chairman.

‘Unclaimed money is transferred to the Commonwealth after it’s been unclaimed usually for seven years.  The unclaimed money managed by ASIC is always claimable by the rightful owner with no time limit on claims.  In 2016, over $87m was paid out to more than 16,000 people’, Mr Kell said.

‘It’s free, quick and easy to use ASIC’s MoneySmart website to search for your name or family and friends, just visit moneysmart.gov.au‘, said Mr Kell.

There are vastly different amounts of forgotten money waiting to be claimed ranging from a few dollars to over a million.  The approximate amounts of unclaimed money available broken down by State and Territory are:

Figure 1: Unclaimed money held by ASIC by State and Territory, approximate amounts (rounded), April 2017

Infographic Unclaimed Money Media 2

People may find they have unclaimed money if they:

  • have moved house without letting the bank or the institution know;
  • have not made a transaction on their cheque or savings account for seven years;
  • stopped making payments on a life insurance policy;
  • have noticed that regular dividend or interest cheques have stopped coming; or
  • were an executor of a deceased estate.

Once a person has found unclaimed money using ASIC’s MoneySmart online search, they need to contact the relevant bank or other financial institution where the money is held if the money is listed as ‘banking’ or ‘life insurance’. The institution will assess and lodge a claim with ASIC.  ASIC aims to process claims within 28 days of receiving all necessary claim documentation and release the funds back to the institution.

‘If you find you have unclaimed money, ASIC’s MoneySmart website offers free and impartial financial guidance and online tools to help you use it wisely and make the most of your money’, said Mr Kell.

ASIC’s unclaimed money infographic shows how much is there to be claimed around Australia.

Infographic Unclaimed Money Thmb

Click to view

Background

ASIC’s MoneySmart website provides trusted and impartial financial guidance and tools to help Australians of all ages manage their money and make informed financial decisions.  It also offers a free and easy search for unclaimed money.

Why is ‘unclaimed money’ held by ASIC?

‘Unclaimed money’ is money from dormant bank accounts, unclaimed life insurance policy payouts and money from shares and other investments that people have not been collected from companies.

‘Unclaimed money’ is transferred to ASIC after a certain period of time to be held by the Commonwealth.  The unclaimed money held by ASIC is always claimable by the rightful owner and there is no time limit on claims.

Interest on unclaimed money is payable from 1 July 2013.  No tax is paid on the interest you earn.

Banks, building societies and credit unions

ASIC holds money from bank, credit union and building society accounts that have not been used in 7 years and contain a balance of $500 or more.  On 31 December 2015 this changed from 3 years. Bank accounts created for children and those held in a foreign currency are exempt.

Life insurance policies

ASIC holds money from life insurance policies from insurance companies or friendly societies that have been unclaimed for 7 years after the policy matures. On 31 December 2015 this changed from 3 years.

Shares and investments

ASIC holds most of the unclaimed money from shares and other investments that people have not collected from companies. This type of unclaimed money is usually the result of a takeover and may include cash and/or shares, depending on the takeover offer.

The approximate amounts of money available in unclaimed bank accounts, life insurance policies and shares broken down by State and Territory are:

State/Territory

Bank accounts

Life insurance policies

Shares & other investments

New South Wales

$200m

$25m

$154m

Victoria

$120m

$16m

$61m

Queensland

$62m

$10m

$40m

Western Australia

$43m

$5m

$27m

South Australia

$17m

$4m

$14m

ACT

$7m

$1m

$7m

Northern Territory

$4.5m

$0.5m

$3m

Tasmania

$5m

$1m

$3m

Basel III Status Update – Where Australia Stands

The Basel Committee on Banking Supervision has today issued the Twelfth progress report on adoption of the Basel regulatory frameworkThis included a status summary for Australian Banks and shows that there are substantial steps to be taken to complete the current implementation, yet alone responding to the APRA-led proposals for further capital reform, which we expect to be the result of a discussion paper expected later in the year.

The complexity of the Basel capital frameworks continues to grow.

This report sets out the adoption status of Basel III standards for each BCBS member jurisdiction as of end-March 2017. It updates the Committee’s previous progress reports which have been published on a semiannual basis since October 2011 under the Committee’s Regulatory Consistency Assessment Programme (RCAP).

The report shows that:

  • all 27 member jurisdictions have final risk-based capital rules, LCR regulations and capital conservation buffers in force;
  • 26 member jurisdictions have issued final rules for the countercyclical capital buffers;
  • 25 have issued final or draft rules for domestic systemically important banks (D-SIBs) frameworks and, with regards to the global systemically important banks (G-SIBs) framework, all members that are home jurisdictions to G-SIBs have final rules in force;
  • 20 have issued final or draft rules for margin requirements for non-centrally cleared derivatives.

Further, while some members have reported challenges in implementing the following standards for which the implementation dates have now passed, the report shows that:

  • 21 member jurisdictions have issued final or draft rules of the revised Pillar 3 framework;
  • 19 have issued final or draft rules of the SA-CCR and capital requirements for equity investments in funds;
  • 17 have issued final or draft rules of capital requirements for CCP exposures.

Member jurisdictions are now turning to the implementation of other Basel III standards, including those on TLAC holdings, the market risk framework, the leverage ratio and the net stable funding ratio.

The Basel III framework builds on and enhances the regulatory framework set out under Basel II and Basel 2.5. The attached table is designed to monitor the adoption progress of all Basel III standards, which will come into effect by 2019. The monitoring table no longer includes the reporting columns for Basel II and 2.5, nor those Basel III standards that have been implemented by all BCBS members (definition of capital, capital conservation buffer and liquidity coverage ratio).

  • The following aspects of the risk-based capital standards are still being implemented:
    o Countercyclical buffer: The countercyclical buffer is phased in parallel to the capital conservation buffer between 1 January 2016 and year-end 2018, becoming fully effective on 1 January 2019.
    o TLAC holdings: The TLAC holdings standard was issued by the Committee in October 2016. It applies to all banks and describes the prudential treatment for holdings of instruments that comprise TLAC for the issuing G-SIB. The standard will take effect from 1 January 2019.
    o Minimum capital requirements for market risk: In January, the Committee issued the revised minimum capital requirements for market risk, which will come into effect on 1 January 2019.
    o Capital requirements for equity investment in funds: In December 2013, the Committee issued the final standard for the treatment of banks’ investments in the equity of funds that are held in the banking book, which took effect from 1 January 2017.
    o SA-CCR: In March 2014, the Committee issued the final standard on SA-CCR, which took effect on 1 January 2017. It replaced both the Current Exposure Method (CEM) and the Standardised Method (SM) in the capital adequacy framework, while the IMM (Internal Model Method) shortcut method is eliminated from the framework.
    o Securitisation framework: The Committee issued revisions to the securitisation framework in December 2014 and July 2016 to strengthen the capital standards for securitisation exposures held in the banking book, which will come into effect in January 2018.
    o Margin requirements for non-centrally cleared derivatives: In September 2013, the Committee issued the final framework for margin requirements for non-centrally cleared derivatives. Subsequently, in March 2015, the Committee published a revised version. Relative to the 2013 framework, the revised version changes the beginning of the phase-in period for collecting and posting initial margin on non-centrally cleared trades from 1 December 2015 to 1 September 2016. The full phase-in schedule has been adjusted to reflect this nine-month change in implementation. The revisions also institute a six-month phase-in of the requirement to exchange variation margin, beginning 1 September 2016.
    o Capital requirements for bank exposures to central counterparties: In April 2014, the Committee issued the final standard for the capital treatment of bank exposures to central counterparties. These came into effect on 1 January 2017.
  • Basel III leverage ratio: In January 2014, the Basel Committee issued the Basel III leverage ratio framework and disclosure requirements. Implementation of the leverage ratio requirements began with bank-level reporting to national supervisors until 1 January 2015, while public disclosure started on 1 January 2015. The Committee will carefully monitor the impact of these disclosure requirements. Any final adjustments to the definition and calibration of the leverage ratio will be made by 2017, with a view to migrating to a Pillar 1 (minimum capital requirements) treatment on 1 January 2018 based on appropriate review and calibration.
  • Monitoring tools for intraday liquidity management: This standard was developed in consultation with the Committee on Payment and Settlement Systems to enable banking supervisors to better monitor a bank’s management of intraday liquidity risk and its ability to meet payment and settlement obligations on a timely basis. The reporting of the monitoring tools commenced on a monthly basis from 1 January 2015 to coincide with the implementation of the LCR reporting requirements.
  • Basel III net stable funding ratio (NSFR): In October 2014, the Basel Committee issued the final standard for the NSFR. In line with the timeline specified in the 2010 publication of the liquidity risk framework, the NSFR will become a minimum standard by 1 January 2018.
  • G-SIB framework: In July 2013, the Committee published an updated framework for the assessment methodology and higher loss absorbency requirements for G-SIBs. The requirements came into effect on 1 January 2016 and become fully effective on 1 January 2019. National jurisdictions agreed to implement the official regulations/legislation that establish the reporting and disclosure requirements by 1 January 2014.
  • D-SIB framework: In October 2012, the Committee issued a set of principles on the assessment methodology and the higher loss absorbency requirement for domestic systemically important banks (D-SIBs). Given that the D-SIB framework complements the G-SIB framework, the Committee believes it would be appropriate if banks identified as D-SIBs by their national authorities were required to comply with the principles in line with the phase-in arrangements for the G-SIB framework, ie from January 2016.
  • Pillar 3 disclosure requirements: In January 2015, the Basel Committee issued the final standard for revised Pillar 3 disclosure requirements, which took effect from end-2016 (ie. banks are required to publish their first Pillar 3 report under the revised framework concurrently with their year-end 2016 financial report). The standard supersedes the existing Pillar 3 disclosure requirements first issued as part of the Basel II framework in 2004 and the Basel 2.5 revisions and enhancements introduced in 2009.
  • Large exposures framework: In April 2014, the Committee issued the final standard that sets out a supervisory framework for measuring and controlling large exposures, which will take effect from 1 January 2019.
  • Interest rate risk in the banking book: In April 2016, the Committee issued the final standard for Interest Rate Risk in the Banking Book (IRRBB), which is expected to be implemented by 2018.

How our addiction to safety could lead to another financial crisis

From The Conversation.

Research shows that the human brain is biased in favour of making safe choices. This is part of the drive behind “securitisation”, where the financial sector turns risky debt into “safe” debt by pooling assets together or carving out the safe bits.

But this debt may not be as safe as we think. And as individual traders load up on “safe” debt, they are putting us collectively at risk of another financial crisis.

This exact scenario has led to previous financial crises. It contributed to the panic of 1857. It also led to the 2008 global financial crisis.

Safe debt

Imagine a bank lends someone A$1 million to buy a house, but should the person default the bank can only recover A$500,000 by foreclosing and selling the home. The bank does not want this loan on its books so it sells the loan to a financial institution that specialises in creating “safe debt”.

The loan is then split into two pieces of A$500,000, one labelled a “senior tranche” that gets paid first, the other is called the “junior tranche”. Because A$500,000 can be recovered by foreclosing and selling the home, the senior tranche is sure to get all its money back.

Voila, A$500,000 of safe debt has just been carved-out of a risky A$1 million loan.

But the junior tranche can also be made safer by pooling several different loans together. This process can and does take place with many different kinds of debt – mortgages, corporate bonds, credit cards, car loans, and student loans among them.

This is how trillions of dollars of risky assets were transformed into supposedly “safe” assets before the global financial crisis.

An obsession with safety

Studies have found that different regions of the brain are involved in evaluating safe and risky choices. Because of this, humans are hardwired to treat safe and risky choices differently.

A collection of experimental studies have more directly tested the notion that certain and uncertain choices are evaluated differently. They found that people display a disproportionate preference for safety.

This means that financial institutions have an incentive to carve-out as much safe debt as they possibly can, because we are willing-to-pay disproportionately more for safe debt.

This is fine as long as the assets really are safe. But if they aren’t, it’s potentially a big problem.

Going back to the example from earlier, how sure can we be that in a real crisis the house wouldn’t actually be sold for less than A$500,000? Perhaps A$400,000 or even A$300,000?

If A$500,000 of the debt was carved-out and considered safe, but only A$300,000 is recovered, then the “safe” debt is really not that safe. It is, in fact, a risky asset.

And if our brains lead us to pay disproportionately more for safe debt, then the same preference, in reverse, could cause a sudden and sharp decline in the value of its risky incarnation.

How it could go wrong

The fact that we have a disproportionate preference for safety means financial institutions have an incentive to create as much safe debt as possible. In the past this has led to excess creation of safe debt, where even risky debt is traded as safe debt.

In this context, a financial crisis is a sudden realisation that what was previously thought to be safe, is actually risky.

The onset of the global financial crisis has been linked to exactly this phenomena. Before the crisis, the hunger for safe debt had led to the creation of huge numbers of supposedly safe debt. By July 2007, mortgage defaults revealed how risky this debt actually was, and a crisis ensued.

To prevent another financial crisis we need to be proactive. There needs to be regulations in place with the aim of preventing the excess creation of safe debt.

It’s not an easy problem to solve, as the human desire for safety will continue, and no one will ever know exactly what is safe, especially in a crisis. However, more regulatory caution should be built into the system.

Author: Hammad Siddiqi, Research Fellow in Financial Economics, The University of Queensland

Is monetary policy less effective when interest rates are persistently low?

Interesting BIS working paper which says that at low interest rates,  monetary policy transmission becomes less effective.

Interest rates in the core advanced economies have been persistently low for about eight years now. Short-term nominal rates have on average remained near zero since early 2009 and have been even negative in the euro area and Japan, respectively, since 2014 and 2016. The drop in short-term nominal rates has gone along with a fall in real (inflation-adjusted) rates to persistently negative levels. Long-term rates have also trended down, albeit more gradually, over this period: in nominal terms, they fell from between 3–4% in 2009 to below 1% in 2016.

From a historical perspective, this persistently low level of short- and long-term nominal rates is unprecedented. Since 1870, nominal interest rates in the core advanced economies have never been so low for so long, not even in the wake of the Great Depression of the 1930s (Graph 2, top panels). Elsewhere, too, including in Australia, short- and long-term interest rates have fallen to new troughs, reflecting in part global interest rate spillovers especially at the long end.

The persistently low rates of the recent past have reflected central banks’ unprecedented monetary easing to cushion the fallout of the Great Financial Crisis (GFC), spur economic recovery and push inflation back up towards objectives. However, despite such efforts, the recovery has been lacklustre. In the core economies, for instance, output has not returned to its pre-recession path, evolving along a lower, if anything flatter, trajectory, as growth has disappointed. At the same time, in many countries inflation has remained persistently below target over the past three years or so.

Against this background, there have been questions about the effectiveness of monetary policy in boosting the economy in a low interest rate environment. This paper assesses this issue by taking stock of the existing literature. Specifically, the focus is on whether the positive effect of lower interest rates on aggregate demand diminishes when policy rates are in the proximity of what used to be called the zero lower bound. Moreover, to keep the paper’s scope manageable, we take as given the first link in the transmission mechanism: from the central bank’s instruments, including the policy rate, to other rates.

The review suggests that both conceptually and empirically there is support for the notion that monetary transmission is less effective when interest rates are persistently low. Reduced effectiveness can arise for two main reasons: (i) headwinds that typically blow in the wake of balance sheet recessions, when interest rates are low (eg debt overhang, an impaired banking system, high uncertainty, resource misallocation); and (ii) inherent nonlinearities linked to the level of interest rates (eg impact of low rates on banks’ profits and credit supply, on consumption and saving behaviour – including through possible adverse confidence effects – and on resource misallocation). Our review of the existing empirical literature suggests that the headwinds experienced during the recovery from balance-sheet recessions can significantly reduce monetary policy effectiveness. There is also evidence that lower rates have a diminishing impact on consumption and the supply of credit. Importantly, these results point to an independent role for nominal rates, regardless of the level of real (inflation-adjusted) rates.

The review reveals that the relevant theoretical and empirical literature is much scanter than one would have hoped for, in particular given that periods of persistently low interest rates have become more frequent and longer-lasting. While there are appealing conceptual arguments suggesting that monetary transmission may be impaired when rates are low, many of these have not been formalised by means of rigorous theoretical modelling. And the extant empirical work is limited, both geographically and in scope. For instance, most studies assessing changes in monetary transmission in low rate environments focus on the United States. Similarly, there is hardly any work assessing specific mechanisms. The field is wide open and deserves further exploration, not least given the first-order policy implications.

Note: BIS Working Papers are written by members of the Monetary and Economic Department of the Bank for International Settlements, and from time to time by other economists, and are published by the Bank. The papers are on subjects of topical interest and are technical in character. The views expressed in them are those of their authors and not necessarily the views of the BIS.

Westpac increases fixed rate home loan deals

From News.com.au

WESTPAC has followed the lead of the Commonwealth Bank and today increased fixed rate loans deals.

Just three days after CBA announced increases on fixed loan deals with interest-only investment loans getting the biggest hikes, Westpac has just announced their home loan customers will also be hit.

They are hiking fixed interest rate deals across their owner occupier and investment products.

Owner occupiers on interest-only fixed loans will be the worst hit — Westpac is increasing rates by 30 basis points across 1, 2, 3, and 5 year fixed deals.

For a three-year fixed rate loan — among the most popular fixed rate term for borrowers — fixed rates for owner occupier interest-only loans will rise by 30 basis points to 4.56 per cent.

For investors on interest-only deals fixed rates will rises by 10 basis points per cent across 1, 2, 3 and 5 year loan terms.

The Westpac Bank is hitting customers with interest rate hikes.

Investor principal and interest deals will remain unchanged for 1, 3 and 5 year loan terms.

Owner occupiers with principal and interest repayments will also be spared moves on 1, 3, and 5 year deals, while two-year fixed loan rates will drop by 11 basis points to 3.88 per cent.

Westpac’s subsidiary banks, St George and Bank SA are also experiencing moves across many fixed rate deals.

1300homeloans director John Kolenda said in more than 20 years in the mortgage industry he had never seen times like now with continuous changes to rate deals by banks simply wanting to boost their margins.

“I’ve never seen anything like the current market conditions where we have banks moving all over the place and raising rates across different products and totally out of cycle,’’ he said.

A Westpac spokeswoman said these deals which only affect customers who fix their loan from today onwards was “in response to recent regulatory changes.”

Financial comparison site Mozo’s spokeswoman Kirsty Lamont said many lenders are continuing to push up fixed rate deals and putting more pressure on borrowers’ budgets.

“Hot on the heels of the round of out-of-cycle hikes last month we’ve seen 28 lenders in total now up fixed rates since the start of April,’’ she said.

“The fresh round of hikes has hit owner-occupiers and investors paying interest-only loan the hardest as lenders respond to APRA’s recent crackdown on interest-only loans.”

On a $300,000 30-year loan for an owner occupier paying interest only, for a three-year fixed deal their rate new rate of 4.56 per cent will increase monthly repayments by $75 to $1140.

For an investor with the same sized loan paying interest-only their new three-year rate will be 4.56 per cent and their monthly repayments will rise by $25 to $1140.

For owner occupiers and investors paying principal and interest on three-year fixed deals the fixed rates won’t change from 4.09 per cent for owner occupiers and 4.29 per cent for investors.

 

S&P says the number of delinquent housing loans have fallen unexpectedly in Australia

From Business Insider.

Standard & Poor’s detected a sudden fall in problem mortgages in February, a month when delinquencies usually rise.

The number of delinquent housing loans in Australia fell to 1.23% in February, down from January’s 1.29%, according to the RMBS Arrears Statistics: Australia report, by S&P Global Ratings.

“We normally expect arrears to increase month-on-month in February, reflecting the seasonal effects of Christmas spending and summer holidays,” says S&P.

“The month-on-month decline was unexpected, particularly at a time of rising interest rates.”

Most of the big banks last month raised rates for owner-occupier loans and for interest only loans.

S&P expects these rate increases will put further pressure on arrears.

The S&P report shows that mortgages 31 to 60 days in arrears recorded the greatest improvement in February after recording the largest increase in January.

“The month-on-month decline in arrears in February could mean that some of the rise in arrears in January was partly due to the timing of mortgage-rate
increases,” says S&P.

“Mortgage-rate increases can create an initial spike in arrears when first applied, particularly if they are introduced when more borrowers are likely to be on holidays. This might account for part of the increase we observed in January.”

Victoria and New South Wales, which together make up more than 54% of the total loans, both recorded a month-on-month decline in arrears.

Queensland was unchanged at 1.65%, the ACT rose to 0.81% from 0.78% in January and Tasmania was up to 1.51% from 1.47%.

More warnings about the Australian housing market

From wsws.org.

Australian house prices have continued their unprecedented ascent, with median home values in Sydney this week hitting a record $1.15 million and in Melbourne, $826,000, after rising by 13.1 percent and 7.6 percent respectively in the first three months of the year.

The frenzied growth of the east coast market has prompted a series of warnings pointing to the contradiction between inflated house prices and the stagnant or declining incomes of working people, amid a slump across manufacturing and other industries.

Last week, Moody’s cautioned that Australia’s housing market was among four in the world most susceptible to a crash in the event of an economic shock or a renewed downturn. The international ratings agency drew attention to the mountain of debt upon which the property bubble has been built, stating: “Australian households stand out for lower financial buffers and higher leverage.”

Moody’s drew a parallel between debt-to-liquid asset ratios in Australia, and in Ireland before the collapse of the property market in 2007. It commented: “[I]n the event of a negative income shock, the scope for Australian households to draw down parts of their financial assets to maintain debt service and overall spending is more limited than elsewhere.”

Deloitte Access Economics likewise pointed to the buildup of debt this week, noting that household debt to income ratios are the second highest in the world after Sweden. National household debt currently stands at 185 percent of annual disposable income, up from around 70 percent in the early 1990s.

Deloitte has estimated that house prices are around 30 percent overvalued compared to national income, the highest margin in over three decades. The firm’s director, Chris Richardson warned that in “global terms our housing prices are asking for trouble.”

In comments to the National Press Club last week, Richardson warned of the vast implications of any slowdown of the Chinese economy for the Australian housing market and financial system. He predicted that a sharp crisis in China could result in the collapse of house prices by around 9 percent, as part of a broader downturn that could destroy almost $1 trillion of national wealth.

Martin North, of Digital Finance Analytics, drew parallels with the US subprime mortgage crisis that played a key role in precipitating the global financial crisis of 2007–08. He listed declining incomes, rapidly rising household debt and a growth in mortgage stress as features in common.

North told Fairfax Media: “This falling real income scenario is the thing that people haven’t got their heads around.” National wage growth across the private sector was just 1.8 percent last year, the lowest level since records began in 1969. Modelling by North has indicated that 669,000 families, or 22 percent of borrowing households, are already in mortgage stress.

Other reports have pointed to the mounting social crisis caused by the ongoing rise in house prices, prompting warnings of a rise in mortgage arrears and defaults.

In its Financial Stability Review released last week, the Reserve Bank reported that around one third of mortgaged households have not built up any substantial repayment buffer, or are a month or less ahead of mortgage repayments. In other words, they are vulnerable to economic fluctuations and any change in their circumstances.

An ALI Group survey last month showed that 41 percent of homeowners feared that they would be unable to keep up with mortgage repayments if they lost their job.

This finding tallied with figures late last year from financial management software company Moneysoft, which found that more than 25 percent of non-investor home loans were “unhealthy.” Loans were deemed to be in bad health if they had grown by at least 5 percent over the course of the loan. Another 25 percent were termed “neutral,” meaning that they had neither grown nor substantially fallen.

The precarious situation of many has contributed to a growth in delinquent housing loans. They rose from 1.15 percent of all housing loans last December, to 1.29 percent in January, according to Standard and Poor’s. In some states the figure is far higher, with Western Australia, which has been hit by the collapse of the mining boom, registering 2.33 percent.

These conditions have led to intensified calls for the Reserve Bank to raise its official interest rate from a historic low of 1.5 percent, and take other measures to rein in speculative loans, including interest-only loans that do not require the borrower to pay off any of the principal for fixed periods of up to seven years.

Minutes from the central bank’s April meeting stated that it “would consider further measures if needed,” but did not spell them out. Any rise in interest rates, however, could lead to a rapid fall in borrowing, along with a rise in mortgage defaults, potentially provoking a dramatic contraction of the entire market.

The soaring cost of housing, which has made it unaffordable for many young people, has intensified the crisis of the Liberal-National government of Malcolm Turnbull. Like its Labor Party predecessor, the government has maintained capital gains tax concessions, and other policies, such as negative tax gearing, which have provided a boon for property developers.

Amid reported divisions within the government, various proposals have been floated, including allowing first homebuyers to access their superannuation funds to purchase a house and making limited reductions in the 50 percent capital gains tax concessions.

The Labor Party has demagogically denounced negative gearing tax incentives for investors. Their posturing was punctured by reports this week that federal Labor politicians own some 72 investment properties in total. Their Liberal-National and Greens colleagues likewise have substantial material interests in the ongoing housing boom.

None of the measures being discussed by the government, or any section of the political establishment, will resolve the housing affordability crisis and the massive growth of property market speculation that has fuelled it.

Loans to investors made up around 39 percent of all housing loans in January, with only 7 percent of loans for first homebuyers. The proportion of investors is higher in Sydney and Melbourne, the centres of the property boom.

According to the Australian Bureau of Statistics, investor loans grew by 27.5 percent on a seasonally adjusted basis, between January 2016 and 2017. The growth was well above the 10 percent annual limit placed on the banks by regulatory authorities.

The rise has coincided with an ongoing decline in productive investment. Corporate investment in new buildings, equipment and machinery fell in each quarter last year, with a decline of 2.1 percent in the December quarter alone.

As has happened around the world, the deepening crisis of global capitalism and the escalating slump in the real economy has seen the corporate elite turn to ever-more speculative financial operations. These do not produce real social wealth but inflate the value of existing assets, in this case, leading to a housing crisis for millions of working people.

ANZ Exits Retail Banking In Vietnam

ANZ today announced it had entered into an agreement to sell its retail business in Vietnam to Shinhan Bank Vietnam.

Shinhan Bank Vietnam is part of the Shinhan Financial Group, a South Korean company listed on the Korean and New York stock exchanges.

ANZ Group Executive, International Farhan Faruqui said: “The sale of our retail business is in line with our strategy to simplify the bank and improve capital efficiency. It allows us to focus resources on our largest business in Asia – Institutional Banking – where we are a top four corporate bank supporting regional trade and capital flows.

“We have a long history in Vietnam and we will be maintaining our presence through our Institutional Bank in Vietnam which will continue to support our corporate clients in the Greater Mekong Region.

“The agreement with Shinhan Bank Vietnam includes all eight branches located in Hanoi and Ho Chi Minh City, and ongoing roles for all retail staff. This will help ensure a smooth transition for our customers, while presenting a great opportunity for our people to join a retail bank with significant growth plans,” Mr Faruqui said.

The retail business being sold serves 125,000 customers in Vietnam, and includes AUD$320 million in lending assets and AUD$800 million in deposits. The premium to book value for the sale of the retail business in Vietnam is not material to the ANZ Group.

Subject to regulatory approval, ANZ expects the transfer of the Vietnam retail business to Shinhan Bank Vietnam will be complete by the end of 2017.

ANZ’s Institutional Bank has a presence in 15 different markets in Asia and was ranked as a top four corporate bank in the region by Greenwich Associates in 2016.

The sale of ANZ’s retail business in Vietnam follows the announcement in October 2016 of the sale of ANZ’s retail and wealth business in five Asian countries to DBS.