Having previously forecast that the RBA would institute two 25 basis point interest rate hikes in the second half of 2019, National Australia Bank (NAB) isn’t expecting the rises to come until the second half…
Australia’s banking system emerged from the GFC relatively intact, thanks to Australia’s comparative strength at that time. Today, the banking sector represents a huge part of the Australian market.
Despite this, Australians have generally been kept in the dark about their practices and sky-high profit margins.
An important feature of Australian banking is the high amount of debt from the residential sector. Housing loans have been the Aussie bank’s bread and butter for decades, and the housing boom has put a rocket under their profits.
Now, however, there is growing concern that the wealth created by this over-
Australians are rightly asking themselves about the balance between competition and regulation in the banking system.
After years of public pressure, the Royal Commission’s inquiry into Australia’s financial services has revealed a culture of malpractice and misconduct throughout the banking system.
And the ‘big four’ — National Australia Bank (NAB) Commonwealth Bank (CBA) Australia and New Zealand Banking Group (ANZ) and Westpac (WBC) — are seen as the worst offenders.
The inquiry has found evidence of improper lending practices, bribery, and outright fraud. The actions of unregulated financial advisors and planners has also been called into question.
These revelations are profoundly affecting the amount of regulation and competition allowed within the banking sector.
Other forces such as the Asian market, technology, and consumer behaviour are also changing the face of Australian banking.
With luck, the commission’s findings could herald positives changes, both for consumers and the financial industries.
The future of banking in Australia
The inquisition into banking practices could also signal wider systematic change, with loan and credit conditions tightening as the banks are forced to become more ‘responsible’. A system that balances opportunity and risk could be the best way forward to even out profits and consumer welfare.
Here at Markets & Money we continue to run a sceptical eye over the banks, the credit market and Aussie housing regularly, to make sure you’re never vulnerable to the disasters banks get themselves into all too often.
Below you’ll find all the latest news and analysis on the subject.
With the RBA interest rate decision (more like no-decision) this afternoon, the can gets kicked further down the road. At this juncture, there are two competing visions of where rates will go. One is optimistic…
Recently, regulators have been putting on the brakes. They have introduced measures — mainly aimed at investors — to curve household debt.
You may recall that ‘stagflation’ was thought to be impossible. The Phillips Curve suggested that inflation drove employment. That’s why the feds pursue a 2% inflation target rather than a 0% inflation target.
It’s now been four straight losing sessions in a row for stocks heading into today. And recent data continue to bolster the Federal Reserve’s ‘normalisation’ plan.
Now, the Fed has changed course. Instead of loading up on bonds, it’s unloading them. And instead of helping to keep interest rates down, it’s helping to push them up.
Last week we saw property prices continue to drop across most of Australia’s mainland state capitals, but the rate of these declines were still less severe than what we have seen in recent months.
Like the other big four banks, its share price has tumbled over the year due to the Banking Royal Commission. Westpac’s share price is suffering from two things — the fact that it is trading…
At time of writing, the share price of Australia and New Zealand Banking Group Ltd [ASX:ANZ] is down 3.5%, trading at $26.20. Today’s movement comes after an announcement that the company would be vetting its customers…
The Banking Royal Commission has shone a very bright light on this lopsided arrangement called Vertical Integration.
It’s been a tough year for NAB, trading downwards since the establishment of the Banking Royal Commission. Today, recently announced new rules for the bank have been weighing on the mind of investors.
At time of writing, the share price of Commonwealth Bank of Australia [ASX:CBA] is up 1.1%, trading at $69.71. This marks a brief respite from a sustained year of downwards trading: Source: marketindex.com.au It has also been a good day for the other Big Four banks with National Australia Bank Ltd [ASX:NAB] up 1.2%, Australia and New Zealand Banking … Read More
On the back of an improved GDP forecast, the RBA is set to keep interest rates at 1.5% until 2020. Wage growth is meant to improve to 3.5% but in the year to June, annual…
Barely anyone questions why inflation is supposedly good for us. Yet, when asked if inflation is good, they all nod like one of those toy dogs.