K62 Finance

FSI should focus on transparency, says fundie

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Original article by Jonathan Shapiro
The Australian Financial Review – Page: 15 & 20 : 2-Sep-14

The Australian Government’s financial system inquiry should focus on transparency and conflicts of interests. David Booth, co-founder of Dimensional Fund Advisors, says governments tend to over-react when the banking system is under strain. Over-regulation will not prevent future problems if the potential for conflicts of interests is not eliminated. Dimensional Fund Advisors does not pay commissions to financial advisers

CORPORATES
DIMENSIONAL FUND ADVISORS INCORPORATED, THE VANGUARD GROUP INCORPORATED

APRA hints at shifting capital

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Original article by Michael Bennet
The Australian – Page: 16 : 1-Sep-14

The Australian Prudential Regulation Authority has lodged its submission to the Federal Government’s financial system review. The watchdog wants global rules for the banking sector that require greater capital reserves for mortgage lending to apply locally. It is also sharing concerns of the Reserve Bank of Australia that more liberal lending standards could create unsustainable prices in the residential real estate market. Banks using advanced systems can access public guarantees at a lower cost

CORPORATES
BENDIGO AND ADELAIDE BANK LIMITED – ASX BEN, MACQUARIE BANK LIMITED – ASX MBL, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, RESERVE BANK OF AUSTRALIA, DEUTSCHE BANK AG

Macquarie hits political opposition in US network plan

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Original article by John Kehoe
The Australian Financial Review – Page: 15 & 19 : 1-Sep-14

The Utah Taxpayers Association opposes Macquarie Group’s proposal to complete the construction of an open-access broadband network in the state. Work on the Utah Telecommunication Open Infrastructure Agency (UTOPIA) project started about 10 years ago, and Macquarie wants to finance completion of the network. The original proposal was for the network to cover 11 cities in Utah

CORPORATES
MACQUARIE GROUP LIMITED – ASX MQG, UTAH TELECOMMUNICATION OPEN INFRASTRUCTURE AGENCY (UTOPIA), UTAH TAXPAYERS ASSOCIATION, CENTURYLINK, COMCAST CORPORATION, MACQUARIE CAPITAL PARTNERS LLC, ECONOWEST ASSOCIATES

Murray focus ‘on capital reserve requirements’

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Original article by Michael Bennet
The Australian – Page: 19 : 29-Aug-14

Smaller regional banks have in their submissions to the Australian Government’s new financial system review called for less onerous rules on the capital requirements to back mortgage loans. At the same time the four major banks have argued against any increase to the levels that apply to them. However the latter is believed to be the more likely recommendation by the review, as the Reserve Bank of Australia is wary of further strong growth in an already booming residential real estate market

CORPORATES
RESERVE BANK OF AUSTRALIA, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, MACQUARIE GROUP LIMITED – ASX MQG, DEUTSCHE BANK AG, MERRILL LYNCH (AUSTRALIA) PTY LTD

Reserve Bank takes aim at mortgages

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Original article by Michael Bennet
The Australian – Page: 17 : 28-Aug-14

The four major as well as smaller regional banks have lodged their submissions for the second round of the Australian Government’s financial system review. The main lenders are arguing against stricter capital requirement rules, while the minor banks want access to public guarantees on the same favourable terms enjoyed by their competitors. However both lobbying efforts have now been criticised by the Reserve Bank of Australia. It is concerned about any moves that would lead to even greater mortgage lending, as consumers may default when interest rates rise again

CORPORATES
RESERVE BANK OF AUSTRALIA, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIAN BANKERS’ ASSOCIATION, BBY LIMITED, PRICEWATERHOUSECOOPERS, BANK FOR INTERNATIONAL SETTLEMENTS. BASEL COMMITTEE ON BANKING SUPERVISION, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ

Concern over funding of class actions

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Original article by Marianna Papadakis
The Australian Financial Review – Page: 13 : 28-Aug-14

The Australian Institute of Company Directors’ GM, Steve Burrell, has urged stricter regulation of litigation funders. He notes that growing competition in the sector has prompted a rise in class actions in the last 18 months. Litigation funders are typically paid 20-35 per cent of the total payout in successful class actions, but Burrell is concerned about a proposal to allow litigation funders to use the common fund system in Australia

CORPORATES
AUSTRALIAN INSTITUTE OF COMPANY DIRECTORS, INTERNATIONAL LITIGATION FUNDING PARTNERS INCORPORATED, ALLCO FINANCE GROUP LIMITED, BENTHAM IMF LIMITED – ASX IMF, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, CITIBANK PTY LTD, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIAN COMMUNICATIONS CONSUMER ACTION NETWORK LIMITED, TELSTRA CORPORATION LIMITED – ASX TLS, SINGTEL OPTUS PTY LTD, SINGAPORE TELECOMMUNICATIONS LIMITED – ASX SGT, VODAFONE AUSTRALIA LIMITED, NORTON ROSE FULBRIGHT AUSTRALIA

Australians’ Inflation Expectations fall to 5.0% (down 0.3%)

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Original article by Roy Morgan Research
Morgan Poll Update – Page: Online : 26-Aug-14

A face-to-face Morgan Poll has found that Australian inflation expectations over the next two years fell by 0.3 per cent to five per cent a year in July 2014. This is also 0.3 per cent lower than in June 2013. Analysis by federal voting intention shows that Coalition supporters have the lowest inflation expectations, at four per cent, compared with 5.2 per cent for Australian Labor Party supporters. Roy Morgan Research executive chairman Gary Morgan says the most important policy priority for the Federal Government is to reduce Australia’s high level of unemployment and under-employment if it is to stand any chance of winning the 2016 election

CORPORATES
MORGAN POLL, ROY MORGAN RESEARCH LIMITED, LIBERAL PARTY OF AUSTRALIA, NATIONAL PARTY OF AUSTRALIA, AUSTRALIAN LABOR PARTY, AUSTRALIAN GREENS, PALMER UNITED PARTY, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET

S&P 500 makes history

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Original article by John Kehoe, Jonathan Shapiro
The Australian Financial Review – Page: 19 : 27-Aug-14

The S&P 500 scaled new heights on 25 August 2014, briefly rising above the 2,000-point level. The index reached the 1,000-point milestone for the first time in early February 1998. However, US financial stocks have underperformed over the last 16 years, gaining just 10 per cent overall. Shares in Citigroup, Bank of America and American International Group in particular have been savagely sold down since 1998, while the shares of Australia’s four major banks have surged

CORPORATES
STANDARD AND POOR’S 500 INDEX, CITIGROUP INCORPORATED, BANK OF AMERICA CORPORATION, AMERICAN INTERNATIONAL GROUP INCORPORATED, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, WESTPAC BANKING CORPORATION – ASX WBC, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, PM CAPITAL LIMITED, DELTEC INTERNATIONAL GROUP, JP MORGAN AND COMPANY INCORPORATED

NAB funding costs hit GFC low

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Original article by Michael Bennet
The Australian – Page: 23 : 26-Aug-14

Debt financing has become more affordable for Australia’s four main banks, meaning they can compete more vigorously for mortgage loan customers without sacrificing margins. National Australia Bank has in mid-August 2014 sourced $A1.65bn via bonds with a maturity of 5.25 years and an interest rate of just 82 basis points above the bank bill swap rate. This is the lowest cost for such a move by the "big four" since the global financial crisis. The majority of bank funding still comes from deposits, but long-term debt accounts for 12%

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, RESERVE BANK OF AUSTRALIA, MOODY’S INVESTORS SERVICE INCORPORATED, DEUTSCHE BANK AG

How we spent the mining bonanza

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Original article by Matt Wade
The Sydney Morning Herald – Page: 4 : 25-Aug-14

A new study, "The Effect of the Mining Boom on the Australian Economy", has been published by the Reserve Bank of Australia. Authors Peter Downes, Kevin Anslow and Peter Tulip show that consumers saw a benefit from the resources boom due to two main factors. Income levels rose, and the foreign exchange rate was also lifted and made imports cheaper. This in turn meant a fall in car prices of 15% and one of 11% for household goods. Sales of these items were up 30% and 20% respectively as a result. The jobless rate is also some 1.25% lower than it would have been without the boom

CORPORATES
RESERVE BANK OF AUSTRALIA