K62 Finance

Digital cash not on RBA agenda

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Original article by David Swan
The Australian – Page: 29 : 27-Jun-18

The Reserve Bank of Australia’s head of payments policy has downplayed the prospect that the central bank will introduce a digital version of the Australian dollar. Tony Richard says the RBA does not believe that there would be sufficient demand for a digital currency at present. He adds that a digital currency would have implications for the RBA’s financial stability mandate and the structure of the financial sector. Several fintech companies advocated the introduction of a digital Australian dollar in 2017.

CORPORATES
RESERVE BANK OF AUSTRALIA, FINTECH AUSTRALIA PTY LTD, AGRIDIGITAL, OTHERA, AUSTRALIAN BUSINESS ECONOMISTS INCORPORATED

Farm families forgotten in ANZ loan

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Original article by Sue Neales
The Australian – Page: 2 : 26-Jun-18

The banking royal commission’s current hearings are focusing on how banks such as the National Australia Bank and ANZ treat their farming clients. Ben Steinberg from ANZ, which acquired $A2.4 billion worth of farm loans from Landmark Financial Services in 2010, has conceded that it did not take into account the human impact of calling in bad loans and evicting farm families. He said that ANZ should have been more conscious of the fact that many Landmark customers were not used to dealing with a large bank.

CORPORATES
AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, LANDMARK FINANCIAL SERVICES, RABOBANK AUSTRALIA LIMITED, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, RURAL BANK LIMITED, BENDIGO AND ADELAIDE BANK LIMITED – ASX BEN

Plea to end unhealthy RBA cash rate

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Original article by Jacob Greber
The Australian Financial Review – Page: 5 : 26-Jun-18

Economists James Morley from the University of Sydney and Mark Crosby of Monash University say the Reserve Bank of Australia needs to increase official interest rates. Crosby says the cash rate is at an "unhealthy level" at just 1.5 per cent and it is safe to begin tightening monetary policy. Morley argues that there is scope for at least two rate rises without having any adverse impact on the economy. Former RBA board member Warwick McKibbin has called for an increase in the cash rate.

CORPORATES
RESERVE BANK OF AUSTRALIA, UNIVERSITY OF SYDNEY, MONASH UNIVERSITY, AUSTRALIAN NATIONAL UNIVERSITY, GOLDMAN SACHS AUSTRALIA PTY LTD, UNITED STATES. FEDERAL RESERVE BOARD

RBA’s Lowe urged to raise rates

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Original article by Jacob Greber
The Australian Financial Review – Page: 1 & 6 : 25-Jun-18

The general consensus of market economists is that the Reserve Bank of Australia should leave official rates on hold at 1.5 per cent for the rest of 2018 and most of 2019. However, former RBA board member Warwick McKibbin says the central bank should increase the cash rate by at least 25 basis points, as interest rates are beginning to rise globally. He also argues that the RBA should gradually shift its focus from an inflation target of 2-3 per cent toward a nominal income target.

CORPORATES
RESERVE BANK OF AUSTRALIA, BANK OF ENGLAND, UNITED STATES. FEDERAL RESERVE BOARD, FEDERAL RESERVE BANK OF NEW YORK, EUROPEAN CENTRAL BANK, AUSTRALIAN NATIONAL UNIVERSITY, THE BROOKINGS INSTITUTION

Bank customer satisfaction declines during the Finance Royal Commission

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Original article by Roy Morgan
Market Research Update – Page: Online : 25-Jun-18

New research from Roy Morgan shows that bank customer satisfaction has dropped from 82.3% in January 2018, prior to the Finance Royal Commission, to 78.5% in May. This is the lowest monthly satisfaction level since May 2012, but it remains ahead of the long-term average of 74.0% calculated since 2001. The survey also shows that the level of dissatisfaction with banks has increased from 4.6% in January to 6.2%, and is now at the highest level since April 2012. These are the latest findings from the Roy Morgan Single Source survey, which includes over 4,000 interviews per month with bank customers.

CORPORATES
ROY MORGAN LIMITED

CBA gets green light for BBSW settlement

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Original article by James Frost
The Australian Financial Review – Page: 20 : 22-Jun-18

Federal Court judge Jonathan Beach has ruled that the Commonwealth Bank of Australia’s $A25m settlement for manipulating the bank bill swap rate is appropriate. Justice Jonathan Beach said the magnitude of the fines should be sufficient to deter similar misconduct. However, he criticised CBA’s bank bill traders for abusing their "privileged position" and questioned the adequacy of training and monitoring of the bank’s traders.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, FEDERAL COURT OF AUSTRALIA, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, WESTPAC BANKING CORPORATION – ASX WBC

RBA to keep interest rates on hold until 2020: Macquarie

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Original article by Patrick Commins
The Australian Financial Review – Page: 31 : 22-Jun-18

Macquarie Group economists Ric Deverell and Justin Fabo forecast that Australia’s unemployment rate will not fall below five per cent until 2020. They warn that "persistent" spare capacity in the economy will ensure that wages growth remains subdued in the near-term. As a result, they do not expect the Reserve Bank to tighten monetary policy until at least 2020. However, they note that a number of domestic and international factors could affect the timing of an interest rate rise.

CORPORATES
RESERVE BANK OF AUSTRALIA, MACQUARIE GROUP LIMITED – ASX MQG

Murray warns bank inquiry on dangers of over-reach

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Original article by James Eyers
The Australian Financial Review – Page: 1 & 2 : 20-Jun-18

David Murray has cautioned the banking royal commission against recommending onerous sanctions against financial services providers in response to misconduct in the sector. He will use a speech on 20 June to warn that excessive regulation of lenders and financial advisers could force borrowers to seek loans from unregulated providers. Murray, who headed the federal government’s financial system inquiry, will also advocate retention of the vertically integrated model for the financial services industry.

CORPORATES
AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, AUSTRALIAN COMPETITION AND CONSUMER COMMISSION, AMP LIMITED – ASX AMP, AMERICAN CHAMBER OF COMMERCE IN AUSTRALIA

Fed hikes put squeeze on banks

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Original article by Karen Maley
The Australian Financial Review – Page: 1 & 28 : 15-Jun-18

The US Federal Reserve has signalled that two more interest rate increases are likely in 2018, following its second rate rise for the year. The new target range for the federal funds rate is between 1.75% and 2%, while the Reserve Bank of Australia has kept its cash rate at 1.5% for almost two years. The divergence in monetary policy has coincided with rising wholesale borrowing costs for Australia’s major banks, as well as a recent spike in the bank bill swap rate. Shane Oliver of AMP says local banks could potentially respond by increasing their mortgage rates on investment and interest-only loans.

CORPORATES
UNITED STATES. FEDERAL RESERVE BOARD, RESERVE BANK OF AUSTRALIA, AMP LIMITED – ASX AMP, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, FINANCIAL STABILITY BOARD, DEUTSCHE BANK AG, SOCIETE GENERALE SA, BNP PARIBAS SA, GRUPO SANTANDER

Labor credit report delay will entrench banks: Fintechs

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Original article by James Eyers
The Australian Financial Review – Page: 17 : 15-Jun-18

The CEOs of five financial technology lenders have urged shadow treasurer Chris Bowen to reconsider Labor’s push for a key part of the comprehensive credit reporting regime to be delayed for 12 months. The CCR regulations are slated to take effect on 1 July, but Labor has advocated deferring the reporting of repayment history information for a year. The CEOs of SocietyOne, RateSetter, MoneyPlace, Harmoney and WISR have warned that such a delay will allow the major banks to retain their competitive advantage.

CORPORATES
AUSTRALIAN LABOR PARTY, SOCIETYONE AUSTRALIA PTY LTD, RATESETTER AUSTRALIA PTY LTD, MONEYPLACE PTY LTD, HARMONEY LIMITED, WISR LIMITED – ASX WZR