Click on our Secret Library of Evidence ------>

    BANKILEAKS Secret Library

Loan Application Forms (LAF's)  

    Bank Emails to Brokers  

    Then Click on 'VIEW NOTEBOOK'

Join us on facebook

facebook3           facebook2 


What BFCSA Does...

BFCSA investigates fraud involving lenders, spruikers and financial planners worldwide.  Full Doc, Low Doc, No Doc loans, Lines of Credit and Buffer loans appear to be normal profit making financial products, however, these loans are set to implode within seven years.  For the past two decades, Ms Brailey, President of BFCSA (Inc), has been a tireless campaigner, championing the cause of older and low income people around the Globe who have fallen victim to banking and finance scams.  She has found that people of all ages are being targeted by Bankers offering faulty lending products. BFCSA warn that anyone who has signed up for one of these financial products, is in grave danger of losing their home.


Articles View Hits

Whistleblowers' Corner!

To all mortgage brokers, BDMs and loan approval officers! 
Pls Call Denise: 0401 642 344 

"Confidentiality is assured."

Cartoon Corner

Lighten your load today and "Laugh all the way to the bank!"

Denise Brailey

Led by award-winning consumer advocate Denise Brailey, BFCSA (Inc) are a group of people who are concerned about the appalling growth of Loan Fraud around the world. BFCSA (Inc) is a not for profit organisation in the spirit of global community concern and justice.

Click on the Cluster Map.

  • Home
    Home This is where you can find all the blog posts throughout the site.
  • Categories
    Categories Displays a list of categories from this blog.
  • Bloggers
    Bloggers Search for your favorite blogger from this site.
  • Login
    Login Login form

BFCSA David Murray says "need for more stable banking sector" Shall we start protecting consumers from dud Banking PRODUCTS?

  • Font size: Larger Smaller
  • Hits: 1441
  • Print

Protecting taxpayers a key driver

20 October 2014

James Eyres


Financial System Inquiry chairman David Murray is considering all the arguments about whether it is necessary to create a more stable banking sector and if so, how that should be achieved.


The overarching philosphical driver of this year's inquiry has been a global one, how to reduce the chances that taxpayers are forced to pay for a financial institution failure.


In the coming weeks, as he finalises his final report for the Treasurer, Murra will have to paint both his big picture - by describing whether global risks demand more regulatory capital - and the detail.


On the latter, the report should explore what level of captial is necessary to minimise the risks of the government having to step in to prop up a failing bank; and whether any increases to capital should be made via adding more common equity, or alternatively requiring more debt instruments to sit in between that equity and depositors' funds.


Well before Murray and his secretariat began investigations into the banks' ability to absorb losses in a crisis, the banks have been building capital levels.  This has been a function of both demands from the market (nervy post-GFC international bond investors are better protected if the equity buffer is larger) and regulators.


The Australian Prudential Regulatation Authority now requires common equity tier one (CETI) capital of at least 8 per cent of risk weighted assets.  According to JP Morgan analyst Scott Manning CETI ratios (tier 1 capital is common equity plus hybrid debt) across the major banks 8.5 per cent, 150 basis points above the 7 per cent average since 1990, and 300 basis points higher than the low point before the GFC of 5.5 per cent.


So-called "total regulatory capital" (which adds subordinated debt) over risk weighted assets across the major banks is currently 12 per cent, 1 percentage point higher than the 11 per cent average since 1990, according to JP Morgan.


This focus on building up capital has reduced the big banks returns on equity - down from the low 20s ahead of the GFC to around 16 per cent today, which has reduced returns to shareholders.  But balance sheet funding is also more "sticky"" as banks have reduced the proportion of funding from wholesale capital markets in favour of higher levels of domestic deposits.


If Murray is inclined to recommend that total capital levels in the big banks should be even higher - and the market thinks that he will - he may target higher CETI, which chould be achieved in two ways, by stipulating a higher D-SIB capital charge (currently set at 1 per cent by APRA on the big banks to recognise their systemic importance); or by increasing risk weightings assigned to particular types of lending such as mortgages............


read more




Last modified on
Rate this blog entry:


  • No comments made yet. Be the first to submit a comment

Leave your comment

Guest Monday, 13 July 2020