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Banks, behaving badly
plastic
post Posted: Dec 24 2018, 06:44 AM
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ANZ(NZ Ltd) came out the other day and said the Reserve Bank will cut rates even more next year. Yet at the same time we have the Federal Reserve raising rates. Bit of an oxymoron if all those banks making loans in NZ like the ANZ are getting their borrowing costs jacked up by the Fed. but can't get a decent rate off the Reserve Bank. Seems like their will be a snap point reached at some stage. Especially since the Reserve Bank came out and said most of the NZ banks are undercapitalized.

It has been an expected norm for decades that the banks shift their interest rates the same way the Reserve Bank shifts theirs. But it is my guess this norm will be departed from and banks will raise mortgage rates in accordance with their borrowing costs and capital requirements rather than acting as a trailer to the Reserve Banks truck.

I also suspect to see some pretty big "bail in" events from the likes of the ANZ and ASB. They are the ones who have the most exposure to the residential housing sector and are most under capitalized as a result. It also leaves them most vulnerable to a housing downturn.






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What did Uncle Mel do to us?
 
blacksheep
post Posted: Dec 18 2018, 09:48 AM
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Malaysia files criminal charges against Goldman Sachs and two former executives
QUOTE
Malaysia has filed criminal charges against Goldman Sachs and two former executives for their role in the alleged multi-billion-dollar ransacking of state investment fund 1MDB.

Attorney General Tommy Thomas said the Government is seeking several billion dollars in fines from Goldman Sachs for breaches of securities laws that involved it making false and misleading statements to investors.

He said his office will seek prison sentences of up to 10 years for the former Goldman executives, Roger Ng Chong Hwa and Tim Leissner.

Malaysian and US prosecutors allege that bond sales organised by Goldman Sachs for 1MDB provided one of the means for associates of former Malaysian prime minister Najib Razak to steal billions over several years from a fund that was ostensibly set up to accelerate Malaysia's economic development.

The scandal, first reported by Sarawak Report and the Wall Street Journal, resulted in Mr Najib and his ruling coalition losing power in a historic election defeat earlier this year.

Mr Najib himself is facing corruption charges. He has said that more than $700 million that moved through his bank account was a political donation from the Saudi royal family, but US prosecutors say it came from 1MDB, of which Mr Najib was the top official.

US legal filings that are part of a Justice Department civil case to recover assets bought with 1MDB funds allege the money was used to finance Hollywood films and spent on luxuries such as diamond jewellery for Mr Najib's wife, a yacht, artworks and high-end properties.

Goldman Sachs denied any wrongdoing in response to Malaysia's criminal charges.

"The firm continues to cooperate with all authorities investigating these matters."

Mr Thomas said $2.7 billion was stolen from three bond sales organised by subsidiaries of Goldman Sachs.

The investment bank, he said, received $600 million in fees for organizing the bond deals, which was several times higher than industry norms.

Mr Leissner and Mr Ng conspired with Mr Najib's associate Low Taek Jho — a key architect of the entire 1MDB fraud — to bribe Malaysian government officials to use Goldman Sachs as the arranger of the bond deals, according to Mr Thomas.

They and Goldman Sachs knew that the money would be stolen, he said.

"Having held themselves out as the pre-eminent global adviser/arranger for bonds, the highest standards are expected of Goldman Sachs," the Attorney General's statement said.

Prosecutors plan to seek fines "well in excess" of the amount allegedly stolen because of the severity of the violations of Malaysia's laws, Mr Thomas said.

Mr Leissner, who headed Goldman's operations in South-East Asia, last month pleaded guilty in the US to money laundering conspiracy and conspiring to violate foreign bribery laws after the Justice Department charged him, Mr Ng and Mr Low in relation to the 1MDB scanda

Mr Ng was arrested in Malaysia in early November and Mr Low, also known as Jho Low, remains at large. He has previously maintained his innocence in statements via a lawyer.

Before facing criminal charges, Mr Low became well known in the New York City and Los Angeles club scenes.

In 2012, he threw a lavish 31st birthday bash attended by Leonardo DiCaprio, Kim Kardashian and other celebrities.

APl
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The herd instinct among forecasters makes sheep look like independent thinkers. Edgar Fiedler

If the freedom of speech is taken away then dumb and silent we may be led, like sheep to the slaughter. George Washington
 
blacksheep
post Posted: Dec 14 2018, 12:50 PM
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PR from the Reserve Bank of New Zealand - some way off but assume this will apply if/when implemented to Australian banks operating in NZ - https://www.rbnz.govt.nz/news/2018/12/reser...al-systems-risk

Reserve Bank proposes that bank owners bear greater share of financial system's risks
Release date14 December 2018
QUOTE
The Reserve Bank is consulting on a proposal to raise the amount of capital that banks must hold.

"Insisting that bank shareholders have a meaningful stake in their bank provides a greater incentive to ensure it is well managed. Having shareholders able to absorb a greater share of losses if the company fails also provides stronger protection for depositors,” Deputy Governor and General Manager of Financial Stability Geoff Bascand said today.

The Reserve Bank has been reviewing bank capital rules since early 2017.

“Bank crises happen more often than many people care to remember, and the economic and social costs of bank failures can be very high and persistent. These proposals are designed to make bank failures less frequent. With these changes we estimate the banking system will be resilient to shocks that might occur only once every two hundred years,” Mr Bascand said.

The proposal would see banks’ capital levels increase materially. We are proposing to almost double the required amount of high quality capital that banks will have to hold. In practice, actual changes to the amount that they hold will be less than double and will vary. The increase will depend on their current levels of capital, how much extra they choose to hold above the required minimum, and whether they are a large or small bank. Generally, it will be an increase of between 20 and 60 percent. This represents about 70 percent of the banking sector’s expected profits over the transition period. We expect only a minor impact on borrowing rates for customers.

“While borrowing costs may increase a little, and bank shareholders may earn a lower return on their investment, we believe these impacts will be more than offset by having a safer banking system for all New Zealanders,” Mr Bascand said.

We are consulting on a five year transition period for banks to meet the new requirements. We welcome feedback on our proposals. The deadline for feedback is 29 March 2019.

https://www.rbnz.govt.nz/news/2018/12/reser...al-systems-risk



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The herd instinct among forecasters makes sheep look like independent thinkers. Edgar Fiedler

If the freedom of speech is taken away then dumb and silent we may be led, like sheep to the slaughter. George Washington
 
blacksheep
post Posted: Dec 12 2018, 03:15 PM
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QUOTE
Shaw and Partners' bank analyst Brett Le Mesurier recently calculated bad behaviour by the "Big Four" banks and AMP had so far cost them close to $3.8 billion, but this was likely to almost double to $7.4 billion by 2020

The cost of bad behaviour
Company Prior costs H2 2018 costs (est) H1 2019 costs (est) Total (est)
AMP $517m $83m $570m $1,170m
ANZ $340m $573m $470m $1,383m
CBA $2,257m * $320m $2,577m
NAB $300m $450m $350m $1,100
WBC $384m $376m $410m $1,150m
Total $3,779m $1,480 $2,100m $7,379m


https://www.abc.net.au/news/2018-12-12/cba-...ection=business



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The herd instinct among forecasters makes sheep look like independent thinkers. Edgar Fiedler

If the freedom of speech is taken away then dumb and silent we may be led, like sheep to the slaughter. George Washington
 
triage
post Posted: Dec 11 2018, 10:12 AM
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Not sure where exactly that ACCC has been during these years of bankers running amok but the good news is that once the ACCC get onto a case they go in boots and all (unlike the dandies at ASIC and APRA). So they reckon that once again the bankers didn't let a good crisis go to waste. When APRA insisted that bankers restrict interest only loans to 30% of the home loans they issued going forward the banks took the opportunity to act in concert and increase the interest rates on existing interest only home loans. By so doing the banks pocketed in excess of one billion bucks of windfall profit in just the last year.

Hopefully the ACCC takes 'em to the cleaners.

https://www.abc.net.au/news/2018-12-11/exis...s-accc/10604314



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"The market can stay irrational longer than you can stay solvent." John Maynard Keynes

"The crisis takes a much longer time coming than you think, and then it happens much faster than you would have thought." Rudiger Dornbush

Mozart fixes everything and Messi is a dog
 
blacksheep
post Posted: Dec 10 2018, 08:27 PM
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Aussie banks on the BBQ today
ANZ down -4.16%
CBA down -2.98%
NAB down -2.54%
WBC down-3.38%

THE BIG FOUR BANKS (ANZ, CBA, NAB, WBC)
https://www.shortman.com.au/market
Attached File(s)
Attached File  anz.png ( 96.24K ) Number of downloads: 2
Attached File  cba.png ( 98.11K ) Number of downloads: 3
Attached File  nab.png ( 91.95K ) Number of downloads: 2
Attached File  wbc.png ( 95.76K ) Number of downloads: 2

 




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The herd instinct among forecasters makes sheep look like independent thinkers. Edgar Fiedler

If the freedom of speech is taken away then dumb and silent we may be led, like sheep to the slaughter. George Washington
 


blacksheep
post Posted: Dec 5 2018, 03:22 PM
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And we thought they were now going to play nice lmaosmiley.gif

There's a new place to lodge complaints about the banks — and it's already been flooded
By business reporter Stephanie Chalmers
Posted 24 minutes ago

QUOTE
The new "one-stop shop" for financial complaints only began a month ago, but it has already been flooded with more than 6,500 complaints

The Australian Financial Complaints Authority (AFCA) opened on November 1 and has average 310 complaints per business day so far.

The Federal Government first announced the new dispute resolution body in September last year, as it attempted to head off a royal commission into the banks and financial services sector.

AFCA has replaced three separate bodies — Financial Ombudsman Service, the Credit and Investments Ombudsman and the Superannuation Complaints Tribunal — and to date has experienced a 47 per cent increase in complaints received, compared to its predecessors.

While most complaints were made by individuals, AFCA said 460 were lodged by small businesses.


read more - https://www.abc.net.au/news/2018-12-05/new-...laints/10585690





--------------------
The herd instinct among forecasters makes sheep look like independent thinkers. Edgar Fiedler

If the freedom of speech is taken away then dumb and silent we may be led, like sheep to the slaughter. George Washington
 
triage
post Posted: Dec 4 2018, 07:30 PM
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In Reply To: blacksheep's post @ Dec 4 2018, 03:09 PM

As has been pointed out elsewhere, why would anyone pay to hear what the LNP thinks they might do regarding the banking royal commission findings when everyone knows that will be the job of the incoming Labor government. But yeah obscene that the mob that 27 times knocked back the idea of a banking royal commission being needed are now trying to profit from the rc's existence. There is a saying: "never let a good crisis go to waste".



--------------------
"The market can stay irrational longer than you can stay solvent." John Maynard Keynes

"The crisis takes a much longer time coming than you think, and then it happens much faster than you would have thought." Rudiger Dornbush

Mozart fixes everything and Messi is a dog

Said 'Thanks' for this post: blacksheep  
 
blacksheep
post Posted: Dec 4 2018, 03:09 PM
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Posts: 6,125
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In Reply To: blacksheep's post @ Dec 2 2018, 12:48 PM

Have to agree - "It’s a sickening insult to the victims of banking misconduct who are still trying to put their lives back together."

Assistant Treasurer Stuart Robert to headline fundraiser about the banking royal commission
QUOTE
Assistant Treasurer Stuart Robert will headline a Liberal Party fundraiser that promises political donors an insight into the government's potential response to the banking royal commission.

The lunch, hosted by Liberal National Party backbencher Andrew Wallace, has been slammed by Labor as a crass attempt to capitalise on an explosive probe the Coalition had long opposed.


https://www.smh.com.au/politics/federal/ass...204-p50k1i.html





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The herd instinct among forecasters makes sheep look like independent thinkers. Edgar Fiedler

If the freedom of speech is taken away then dumb and silent we may be led, like sheep to the slaughter. George Washington
 
blacksheep
post Posted: Dec 2 2018, 12:48 PM
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In Reply To: triage's post @ Dec 1 2018, 10:19 AM

triage - it gets worse (if this article by Michael West is correct) - Investigation: how the government is “punishing” bank crimes with tax breaks

QUOTE
Are the victims of bank crime to blame for not being educated? Michael West investigates where the money has gone from corporate law enforcement and discovers the banks have been getting tax deductions.

THE CORPORATE REGULATOR’S decade of deals with the banks began when chairman of the Australian Securities & Investment Commission Tony D’Aloisio struck “Enforceable Undertakings” with ANZ Banking Group in March 2009.

ANZ had been a key player in the spectacular collapse of the financier Opes Prime. ASIC had been investigating ANZ since January 1, 2007. Instead of dragging the bank into court at great cost, D’Aloisio did a “no-blame” deal with ANZ bosses who agreed to “complete a program to remedy deficiencies in operational procedures”.

In August 2007, ANZ appointed receivers to the wine company Evans & Tate Limited. In December 2007, the receivers sold Evans & Tate’s Oakridge Winery to a company jointly owned by Tony D’Aloisio and his wife.

Suffice to say, ASIC’s 2009 Enforceable Undertakings (EUs) with ANZ had the unfortunate appearance of a mutual back-scratching exercise. And the back-scratching rose to new heights in the ensuing years as ASIC dealt with rising, systemic fraud by the bank, particularly in 2017 and 2018 as the Royal Commission was coming on.

Rather than use its considerable powers to enforce the law, ASIC has chosen to pursue enforcement by words. Rather than prosecute or issue fines, the regulators arrange for the banks to: (1) recognise ASIC’s concerns without admitting wrongdoing; (2) accept a remediation process; and (3) make a “Community Benefit Payment”.

These deals with the banks are struck in a way which allows ASIC to achieve a key performance indicator, that is, educating the masses about financial literacy. The Community Benefit Payments set out in the EUs are made to not-for-profit entities which deliver education services in financial literacy.



QUOTE
The EU money trail

The payments which are routed through Financial Literacy Australia Limited have gone to good causes. According to FLA’s financial statements, $17.9 million has come in the door in donations since 2014. It has directed $6 million over four years in grants.

This is a company with no full-time employees, two part-time employees and – at last balance date of 31 December 2017 – $12 million in cash; yet a company which is being wound up, as revealed by Paul Clitheroe last night.

It’s directors – Robert Brown, Paul Clitheroe, Craig Dunn, Linda Elkins, Fiona Guthrie, Elaine Henry, Anthony Mackay, Ian Silk, Michael Smith (retired) – are well connected.

Smith was formerly CEO of the ANZ and Dunn a former CEO of AMP. Paul Clitheroe and his partners sold their IPAC financial advice business to Commonwealth Bank, bought it back and then sold it to AMP. Fiona Guthrie heads up Financial Counselling Australia. Air Commodore Robert Brown is chairman, Australian Defence Force Financial Services Consumer Council and Ian Silk the CEO of Australian Super, the biggest fund in the country.

The company’s website shows FLA has directed its donations to worthy causes such as Brotherhood of Saint Lawrence and Good Shepherd ANZ – “The Firmer Foundations program uses a small group and coaching model to build the financial capability of women who have experienced family violence, economic abuse and/or inter-generational poverty”.


QUOTE
The Literacy Club

Again, the same names bob up. Government appointed members of the Australian Financial Literacy Board are Paul Clitheroe, Robert Brown, Fiona Guthrie and Elaine Henry.

Although ASIC declined to respond, Paul Clitheroe explained that Financial Literacy Australia Limited is being wound up and replaced by Ectsra. He pointed to a May 28, 2018, media release of then Minister for Revenue and Financial Services, Kelly O’Dwyer, which indicates the Turnbull government established Ecstra and arranged for ASIC to direct it $40 million of EU monies.

Other members of the Literacy Board include ASIC deputy commissioner Peter Kell and newish chairman James Shipton. Shipton is a former executive of Goldman Sachs, which agreed to an EU with ASIC in July this year for controversial share market transactions involving private hospital group, Healthscope.


read more - https://www.michaelwest.com.au/investigatio...ith-tax-breaks/

When one looks at the FLA website https://financialcapability.gov.au/ - under research - you see a glossy report by EY Sweeney - a fully integrated part of the EY Advisory business. https://financialcapability.gov.au/files/af...ey-findings.pdf - who are mentioned in another recent Michael West investigation

QUOTE
Matthias Cormann has confirmed the government’s $3 billion spend on the Big Four consultants, responding to Questions on Notice by Greens’ leader Richard Di Natale last week. Although the Finance Minister responded accurately to the questions put, he is almost a billion dollars short on the actual, up-to-date figures. Michael West reports on the mystery of exploding government spending.

The question was all about the billions in taxpayers’ money the government is splashing on the Big Four global accounting firms: EY, PwC, Deloitte an KPMG – large political donors all.

https://www.michaelwest.com.au/discovered-m...lar-black-hole/





--------------------
The herd instinct among forecasters makes sheep look like independent thinkers. Edgar Fiedler

If the freedom of speech is taken away then dumb and silent we may be led, like sheep to the slaughter. George Washington

Said 'Thanks' for this post: triage  
 
 


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