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Aussie banks not to shoulder global burden

By Tim Neary | 08 Mar 2010

April is looming as a significant time for the post-crisis regulatory response, with submissions by the banking industry to the Australian Prudential Regulation Authority on liquidity scheduled to be turned in to a much sharper document on quantitative impacts.

The Australian Bankers Association is also coordinating a full response to the collection of proposed changes to capital, liquidity, provisioning and industry structure, according to a report in the AFR.

Speeches by RBA governor Glenn Stevens suggest that regulator has some sympathy for the Australian banks' position that they, and hence the Australian economy, should not shoulder the undue burden of measures designed for a couple of dozen northern hemisphere banks.

Of the three major prongs of the regulatory response, Australia is most affected by the liquidity proposals due to a structural shortfall of qualifying liquid assets, such as government debt.

The capital and provisioning changes are probably only relatively minor.

Source: Broker News