OPINION: Whatever might be happening in the world, bankers, bank regulators and a minister told Tuesday’s Banking Summit that there is little risk of contagion here.
Bankers, bank regulators and a minister came to The Australian Financial Review Banking Summit on Tuesday determined to reassure Australians that their banking system is rock solid, whatever might be happening elsewhere in the world.with an assumed 43 per cent collapse in house prices, 11 per cent unemployment, a 4 per cent fall in GDP, the cash rate up 400 basis points, and a crippling cyberattack just thrown in too.
Mr Lonsdale says that he can prescribe rules of capital, but he can’t set levels of confidence. The $42 billion that drained out of Silicon Valley Bank in 24 hours in a push-button bank run shows a world that is far more interconnected and fast-moving than even in 2008.CBA chief executive Matt Comyn says that Australia’s big banks make four of the strongest five in the world
If the Banking Summit had been held three weeks ago, the biggest vibe would not have been global banking chaos brought on by interest rate rises, but the mortgage discounting war as banks fight for homebuyers now hunting for better deals as cheaper fixed rate mortgages expire. The government is pressing for more competition in deposit offers and ACCC chairwoman Gina Cass-Gottleib warned the Summit there will be no let-up in its probing of the treatment of savers against borrowers. That is also going to squeeze bank margins in future.Analysts believe that the RBA is likely to pause soon to review the impact of what will in April be 10 straight increases from close to zero rates.
If the Summit had another overriding theme, it’s the further digital transformation of banking, this time in bad ways.
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