Original article by Gerard Cockburn
The Australian – Page: 14 : 16-Jan-20
Documents released under Freedom of Information laws shows that the Reserve Bank of Australia had expressed concern about the growth of ‘buy now, pay later’ platforms in March 2019. The internal memorandum cautioned that the rapid growth in such platforms is beginning to present a risk to financial stability, and noted that some consumers may not fully understand the risks associated with these platforms. However, the central bank also concluded that buy now, pay later services can be more beneficial to some consumers than credit cards.
RESERVE BANK OF AUSTRALIA, AFTERPAY LIMITED – ASX APT, ZIP CO LIMITED – ASX Z1P, GOLDMAN SACHS AUSTRALIA PTY LTD
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.
UNITED STATES. FEDERAL RESERVE BOARD
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.
RESERVE BANK OF AUSTRALIA, CITIGROUP PTY LTD, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIA. DEPT OF THE TREASURY
Original article by David Rogers
The Australian – Page: 18 : 18-Dec-19
Financial markets have priced in a 62 per cent of an official interest rate cut in February, following the release of the federal government’s Mid-Year Economic and Fiscal Outlook. The minutes from the central bank’s latest board meeting indicate that it will assess the economic outlook before deciding whether to make any change to monetary policy at its first meeting for 2020. The minutes noted that some downside risks to the global economic outlook have receded in recent weeks.
RESERVE BANK OF AUSTRALIA
Original article by Cliona O’Dowd
The Australian – Page: 20 : 9-Dec-19
Jonathan Mott of UBS says the outlook for Australia’s banks remains "very challenging", despite the fact that they will be treated more favourably than expected under the Reserve Bank of New Zealand’s new capital requirements. The central bank will phase in the new capital rules over a longer time-frame, while the banks will able to hold a wider range of securities as tier-one capital. Several analysts expect the new capital rules to result in the banks receiving lower dividend payouts from their New Zealand subsidiaries.
RESERVE BANK OF NEW ZEALAND, UBS HOLDINGS PTY LTD, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, CITIGROUP PTY LTD, MORGAN STANLEY AUSTRALIA LIMITED
Original article by Richard Gluyas
The Australian – Page: 17 & 21 : 6-Dec-19
The Reserve Bank of New Zealand will require the local subsidiaries of Australia’s four major banks to hold tier one capital that is equivalent to at least 16 per cent of their risk-weighted assets. They will also be required to hold total capital of 18 per cent, of which 13.5 per cent will have to be common equity tier one capital. However, the new rules will be implemented over a seven-year period, rather than the five-year time-frame that was initially proposed.
RESERVE BANK OF NEW ZEALAND, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, UBS HOLDINGS PTY LTD, S&P GLOBAL RATINGS
Original article by James Eyers
The Australian Financial Review – Page: 13 & 16 : 5-Dec-19
The Reserve Bank of New Zealand will announce its new tier-1 capital requirements for Australian banks’ NZ subsidiaries on 5 December. Cameron Bagrie from Bagrie Economics expects the central bank to push ahead with its previously flagged plan to increase minimum capital ratios to 16 per cent, despite warnings from banks that this is excessive. It is estimated that Australian banks would need to hold about $18bn worth of additional capital in New Zealand, which may reduce both their profits and dividends in Australia.
RESERVE BANK OF NEW ZEALAND, BAGRIE ECONOMICS, EVANS AND PARTNERS PTY LTD, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, NEW ZEALAND BANKERS’ ASSOCIATION
Original article by Matthew Cranston
The Australian Financial Review – Page: 8 : 28-Nov-19
Westpac’s chief economist Bill Evans now expects the Reserve Bank of Australia to pursue quantitative easing in June 2020, having previously forecast that it would commence a bond-buying program in February. Other economists have also revised their timetables for QE after RBA governor Philip Lowe signalled that this option is unlikely to be pursued unless the cash rate falls to 0.25 per cent. Citigroup’s Josh Williamson has ruled out any move to QE in 2020.
RESERVE BANK OF AUSTRALIA, WESTPAC BANKING CORPORATION – ASX WBC, CITIGROUP PTY LTD, HSBC AUSTRALIA HOLDINGS PTY LTD
Original article by Patrick Commins
The Australian – Page: 1 & 6 : 27-Nov-19
Reserve Bank of Australia governor Philip Lowe has used a speech in Sydney to state that conventional monetary policy remains effective and the central bank is unlikely to consider quantitative easing unless the cash rate falls to 0.25 per cent. He indicated that the RBA would buy government bonds if it opted for QE. Lowe also described negative interest rates as the only monetary policy tool that is "truly unconventional", and emphasised that negatives rates are unlikely in Australia.
RESERVE BANK OF AUSTRALIA, AUSTRALIAN LABOR PARTY
Original article by Robert Guy
The Australian Financial Review – Page: 28 : 27-Nov-19
Quay Global Investors portfolio manager Chris Bedingfield contends that the Reserve Bank of Australia should not implement quantitative easing. He argues that the federal government should instead prioritise increased spending on infrastructure, noting that this will create jobs in the short-term and boost productivity in the long-term. Sarah Shaw of 4D Infrastructure also advocates investing in infrastructure to stimulate the economy.
QUAY GLOBAL INVESTORS PTY LTD, 4D INFRASTRUCTURE PTY LTD, RESERVE BANK OF AUSTRALIA, BENNELONG FUNDS MANAGEMENT PTY LTD