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UKguy1979

Just How Safe Is Australia's Banking System?

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I am living and working in Australia at the moment on the Goldcoast. People here are just as mad about houses as they are in the UK, gets on my tits. The house here are just plaster board with an aluminium frame. At the beginning of the week the aussie $ was 1.62 against the pound and mid week suddenly massively dropped to $1.76 to the UK £.

I was tempted to take my money out of the UK for the higher interest rates in Australia. Somethings not right, the rest if the world interest rates are between 0-0.5% and Australia's are 4.5%. When I read the facts on the Aussie banking, it reminded my of Iceland. I'm keeping my money in the UK, I think there is just a big lag before Australia gets wacked by the credit crunch.

What do people think?

http://globaleconomicanalysis.blogspot.com/2010/05/email-regarding-global-bust-ii-perfect.html

Enquiring minds have been investigating the property bubble down under and are asking the question "How Safe is Australia's Banking System?"

Australian economist Steve Keen addresses that question and more in a presentation on his blog How to Profit From the Coming Aussie Property Crash (and Banking Crisis). The answer to the question is on pages 19-23

* 50% of Australia’s mortgage market is held by CBA and Westpac, 25% are held by ANZ & NAB (see CoreData’s Australian Mortgage Report Q1 2010)

* As at December 2009, 60% of CBA’s lending books are mortgages. 50% of Westpac’s lending books are mortgage.1 Both figures are set to continue to grow.

* Look at CBA 2009 annual report—Leverage ratio is almost 20 times (total assets of $620.4 billion against $31.4 billion of equity). Of $620.4 billion of assets, $473.7 billion are loan assets. If around 6.6% of CBA’s loans go bad (any loans, not just mortgages), 100% of its shareholder equity will be wiped out!!2

* Australia’s banks have $13 trillion of off-balance sheet liabilities, according to RBA’s figures!3

The Reserve Bank of Australia has a dark worry about our banks: they get 90 per cent of their cash from each other. If one bank gets into trouble, the Australian financial system could be snap-frozen overnight.

1: http://www.theaustralian.com.au/business/fast-rise-of-round-robin-lenders/story-e6frg8zx-1111116954669

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well there was a government guarantee backing the banks so if they go broke people savings will not be lost

how long will the bubble in australia last? as long as the bubble in china does

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well there was a government guarantee backing the banks so if they go broke people savings will not be lost

how long will the bubble in australia last? as long as the bubble in china does

That guarantee had a time limit on it of 3 years iirc. It runs out in October 2011...about a week before the Aussie banks collapse.

Edited by D'oh

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Dear UKguy,

I have similar opinions on NZ.

I was tempted also to take my money there when I moved to Hamilton, NZ.

However, I too keep my savings in UK as we have protection.

I think the UK has some very high quality housing. So I find it strange when Brits sell their solid home in the UK to buy a similar priced shed in NZ, which they could have purchased for £500 at B & Q.

But I am also realistic that NZ and OZ house property will crash very soon, as is happening in China, who in reality own both countries.

I am living and working in Australia at the moment on the Goldcoast. People here are just as mad about houses as they are in the UK, gets on my tits. The house here are just plaster board with an aluminium frame. At the beginning of the week the aussie $ was 1.62 against the pound and mid week suddenly massively dropped to $1.76 to the UK £.

I was tempted to take my money out of the UK for the higher interest rates in Australia. Somethings not right, the rest if the world interest rates are between 0-0.5% and Australia's are 4.5%. When I read the facts on the Aussie banking, it reminded my of Iceland. I'm keeping my money in the UK, I think there is just a big lag before Australia gets wacked by the credit crunch.

What do people think?

http://globaleconomicanalysis.blogspot.com/2010/05/email-regarding-global-bust-ii-perfect.html

Enquiring minds have been investigating the property bubble down under and are asking the question "How Safe is Australia's Banking System?"

Australian economist Steve Keen addresses that question and more in a presentation on his blog How to Profit From the Coming Aussie Property Crash (and Banking Crisis). The answer to the question is on pages 19-23

* 50% of Australia’s mortgage market is held by CBA and Westpac, 25% are held by ANZ & NAB (see CoreData’s Australian Mortgage Report Q1 2010)

* As at December 2009, 60% of CBA’s lending books are mortgages. 50% of Westpac’s lending books are mortgage.1 Both figures are set to continue to grow.

* Look at CBA 2009 annual report—Leverage ratio is almost 20 times (total assets of $620.4 billion against $31.4 billion of equity). Of $620.4 billion of assets, $473.7 billion are loan assets. If around 6.6% of CBA’s loans go bad (any loans, not just mortgages), 100% of its shareholder equity will be wiped out!!2

* Australia’s banks have $13 trillion of off-balance sheet liabilities, according to RBA’s figures!3

The Reserve Bank of Australia has a dark worry about our banks: they get 90 per cent of their cash from each other. If one bank gets into trouble, the Australian financial system could be snap-frozen overnight.

1: http://www.theaustralian.com.au/business/fast-rise-of-round-robin-lenders/story-e6frg8zx-1111116954669

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  • 259 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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