K62 Finance

RBA says no to Facebook’s new currency

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Original article by Matthew Cranston
The Australian Financial Review – Page: 3 : 10-Jan-20

Facebook’s proposed Libra cryptocurrency should not be allowed to proceed in Australia without major regulation, according to the Reserve Bank of Australia. The RBA expressed this view in a submission to the Senate Select Committee on Financial Technology and Regulatory Technology, with the RBA querying whether there would be much demand for Libra from consumers. The RBA stated Australians were already well served by a range of inexpensive and efficient real-time payment methods.

CORPORATES
FACEBOOK INCORPORATED, RESERVE BANK OF AUSTRALIA

Rate cut odds shorten as bushfires hit economy

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Original article by Adam Creighton
The Australian – Page: 14 : 9-Jan-20

The prospect of an official interest rate cut in February has increased from 38 per cent to almost 60 per cent in the wake of the bushfires crisis. Katrina Ell of Moody’s Analytics says the odds of a rate cut had already been high, while she warns that agriculture, tourism, household spending and productivity are likely to be particularly hard hit by the disaster. Meanwhile, Capital Economics’ analysis suggests that a sharp fall in tourist numbers and farm production could reduce economic growth by about 0.1 per cent in the March quarter.

CORPORATES
MOODY’S ANALYTICS AUSTRALIA PTY LTD, CAPITAL ECONOMICS LIMITED, RESERVE BANK OF AUSTRALIA, GOLDMAN SACHS AUSTRALIA PTY LTD, CITIGROUP PTY LTD

NAB pledges 3-year disaster reprieve

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Original article by Elouise Fowler
The Australian Financial Review – Page: 5 : 8-Jan-20

National Australia Bank has increased its bushfire disaster relief fund to $4m and advised that customers who have been affected by the catastrophe will be given three years to repay their loans. NAB has also indicated that it will provide emergency grants to business and agriculture customers, in addition to retail customers. The Commonwealth Bank, Westpac and ANZ Bank will also provide loan relief to customers who have been affected by the bushfires.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ

APRA blasts banks over risk failures

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Original article by James Frost
The Australian Financial Review – Page: 1 & 2 : 8-Jan-20

The Australian Prudential Regulation Authority is undertaking on-site reviews of the governance, culture, risk and accountability frameworks of the nation’s major banks. APRA chairman Wayne Byres says the initial findings show that changes to these frameworks are needed. Byres has signalled that smaller banks and other financial services providers will also be held accountable. APRA is also APRA is revising the CPS 220 prudential standard.

CORPORATES
AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, WESTPAC BANKING CORPORATION – ASX WBC, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, ALLIANZ AUSTRALIA LIMITED, AUSTRALIA. ATTORNEY-GENERAL’S DEPT. AUSTRALIAN TRANSACTION REPORTS AND ANALYSIS CENTRE

US rates likely to stay on hold, Fed indicates

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Original article by James Dean
The Australian – Page: 14 : 6-Jan-20

The minutes of the Federal Reserve’s December meeting show that the US central bank expects official interest rates to remain unchanged for some time, although this is likely to depend on the economic outlook. Some Federal Reserve officials expressed concern that an extended low interest rate environment may encourage ‘excessive risk-taking’. Meanwhile, former Federal Reserve chairman contends that the central bank has options other than quantitative easing and forward guidance to stimulate the economy in the event of a downturn.

CORPORATES
UNITED STATES. FEDERAL RESERVE BOARD

One in five households facing mortgage stress

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Original article by Duncan Hughes
The Australian Financial Review – Page: 3 : 3-Jan-20

Around two million households are finding it hard to make mortgage repayments despite low interest rates, according to comparison website Finder. The number of households in this position has risen since May 2018, the month before the Reserve Bank made the first of its three cash rate cuts. Brendan Coates from the Grattan Institute notes that borrowers should be looking around more for better mortgage rate offers, while Kate Browne from Finder comments that "mortgages need constant monitoring"

CORPORATES
FINDER.COM.AU, GRATTAN INSTITUTE, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB

Economy fear with credit in the doldrums

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Original article by David Rogers, Michael Roddan
The Australian – Page: 13 & 17 : 24-Dec-19

Data from the Reserve Bank of Australia shows that lending to businesses and property buyers increased by 0.1 per cent in November and 2.3 per cent in the year to November. This is the lowest rate of growth in private sector credit since April 2010. The figures also show that growth in home loans was 0.2 per cent in November and 2.9 per cent year-on-year, while non-housing credit fell by 0.5 per cent in November and 4.9 per cent year-on-year.

CORPORATES
RESERVE BANK OF AUSTRALIA, COUNCIL OF FINANCIAL REGULATORS, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, CORELOGIC AUSTRALIA PTY LTD

Paid leave for ANZ’s fire volunteers

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Original article by Gerard Cockburn
The Australian – Page: 14 : 24-Dec-19

The ANZ Bank has advised that its employees who are volunteer firefighters will be entitled to special paid leave in addition to their standard leave entitlements. ANZ provides its employees with up to five days of paid community service leave each year, and staff who use all of this leave during the current bushfire crisis will be able to access the bank’s special leave policy.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, AUSTRALIAN LABOR PARTY

Australia’s economic interests at risk with RBA out of ammunition

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Original article by John Kehoe
The Australian Financial Review – Page: 2 : 21-Dec-19

Paul Brennan of Citigroup notes that the Reserve Bank of Australia’s average cumulative interest rate cut in the last four monetary policy easing cycles was three percentage points. With the cash rate already at a record low of 0.75 following three rate cuts since June, experts warn that the RBA has limited ‘firepower’ in the event of an economic downturn. RBA governor Philip Lowe has ruled out negative interest rates; while he is open to quantitative easing, his preference is for fiscal stimulus and structural reform.

CORPORATES
RESERVE BANK OF AUSTRALIA, CITIGROUP PTY LTD, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIA. DEPT OF THE TREASURY

Westpac slapped with $9m penalty over poor advice

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Original article by Aleks Vickovich
The Australian Financial Review – Page: 20 : 20-Dec-19

Westpac has been ordered to pay a total of $9.15m for 22 breaches of the Corporations Act. The bank was found to be liable for the ‘deficient and defective’ financial advice that ex-employee Sudhir Sinha provided in 2013 and 2014. Sinha was deemed to have failed to act in the best interests of his clients by providing financial advice that was inappropriate for their personal circumstances. The Australian Securities & Investments Commission has banned Sinha from working in the industry for five years, while it launched legal action against Westpac in 2018.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, FEDERAL COURT OF AUSTRALIA