Sunday, 13 October 2013

Bankers blowing hot air

Nothing like some reassurance from bank bosses.  Seems to be the fashion at the moment. Not that the heads of Australia's Big 4 banks would be concerned about business conditions is it? 

Can the bankers really be trusted to proclaim that there is no problem in the markets which they profit from?

From ANZ (in respect of the New Zealand market but you can bet the thinking is the same in Australia):

ANZ chairman John Morschel has labelled New Zealand's new rules to cool its property market a "sledgehammer to crack a walnut", but conceded the Reserve Bank of Australia was potentially staring down a similar problem, in a wide-ranging speech today (here).
Then from the head of the big cheese, Commonwealth Bank helpfully suggesting the good times might not last:

Commonwealth Bank of Australia Chief Executive Officer Ian Narev, head of the country’s largest mortgage lender, said the nation’s banking industry needs to be watchful of house price increases to avoid a bubble.
While current home price gains are justified by supply and demand fundamentals, the impact of an extended period of low interest rates should be monitored, Narev told reporters after a speech in Melbourne today.
“We’ve got to realize that if we are in a sustained period of low interest rates, it is something we have to keep our eyes on,” he said. (here)

And then giving the game away perhaps is NAB head, Cameron Clyne begging for no interest rate rises (which could be a fair call but for other reasons related to hot money flows):

National Australia Bank chief executive Cameron Clyne said the central banks must adopt a neutral stance until it gets some clear evidence the recent lift in business and consumer confidence, following the election of the new Coalition government, is translating into real economic activity. 
So, Australia's supposedly strong banks might just be a bit worried about a coming housing slowdown.  Of course they wouldn't want to come out and just say it would they? 

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