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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.


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BFCSA: Reserve Bank RISKS Rise as chickens come home to roost: Highest Debt Levels in the World!!

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WARNING: None of this was ever in the interests of Consumers.  The winners have been those Bankers and Politicians who were gaming the banking system. Regulatory pathetic attempts to curb the $680 billion (we say on evidence it is much higher) of INTEREST ONLY MORTGAGE LOW DOC Market has come too late!!!  Time for election of a new Government.  The current crew needs to be thrown in Jail.

Well done Chaps at RBA!!  Highest debt levels in the world and NO WAY OUT!   Bank “Stress Tests” are a joke.  There are supposed to be a Separation of Powers between RBA and APRA.  Now these two Bank corrupted regulators, who have been actively allowing a consistent lowering of banking standards are working together?  They have been aided and abetted by Howard in 2002, and then in 2013 by Abbott who crushed the Gillard FoFA laws protecting consumers, then Turnbull who originally assisted Howard and Costello in 2002.  Now Turnbull is allowing the regulators to collude to further cover up the mess they have assisted creating in the banking system.  These evil creatures have been busy ensuring the elites made pots of money whilst 3 million Australians lose their home via toxic lending products which have swamped the mortgage market riddled with fraud and criminal intent.

Now the incredibly corrupt RBA and APRA have yet another Financial Stability Review to release and “golly gosh Houston – we have a problem!!!”   These two joined at the hip BOZO ORGS are now suggesting what consumers have known for 17 years: a sudden surge in bad loans in the banking sector can be unpredictable and sudden.


Reserve Bank to stress test banking sector as risks rise

Australian Financial ReviewOct 13 2017 9:09 PM

Jonathan Shapiro, Duncan Hughes, Jacob Greber


The Reserve Bank of Australia is opening the door to even tougher regulatory restraints on risky bank lending after announcing it would do its own "bank stress tests," a task usually performed by the prudential regulator.

Amid a fresh barrage of warnings that limits on investor lending would not reduce high household debt levels, the Reserve  flagged plans to gauge how resilient the financial system is to a potential meltdown for the first time.

Preliminary work by analysts unveiled by the central bank in its twice-a-year Financial Stability Review on Friday suggest fallout of a sudden surge in bad loans in the banking sector can be unpredictable and sudden.

While much of the review reiterated the central bank's core view that the nation's financial system remain robust and well capitalised, it expressed a growing sense of concern that too many Australian borrowers are over 60, too willing to take on multiple loans, and without financial reserves to withstand  house price falls.

The report comes as the property market shows ongoing signs of cooling even as the cash rate remains at a record low 1.5 per cent. Debate continues over whether the RBA will be drawn into joining other major global central banks in starting the process of normalising its emergency-level interest rate settings. At this state the first official rate hike is not likely until the second half of next year, according to financial market pricing.

"Household indebtedness is high and, against a backdrop of low interest rates and weak income growth, debt levels relative to income have continued to edge higher," officials warned.

By undertaking what it described as "top down" stress tests of the banking system the Reserve  said it would be able to focus on "risks affecting the whole banking sector, rather than bank-specific risks that are the focus of prudential regulators."

Unlike the Australian Prudential Regulation  Authority – which conducts so-called bottom-up tests on individual banks – the RBA's approach is about  testing the overall financial system's ability to handle shocks, such as collapsed house prices, surging unemployment or a sudden collapse in credit.

"The top-down framework is more transparent to the public authorities as it can clearly identify how shocks propagate through a bank's balance sheet," the Reserve Bank said.

Its move into stress testing was described as "surprising" by AMP Capital chief economist Shane Oliver. "It's possible such tests could be used to justify a further tightening of macro prudential standards at some point."

APRA last conducted a major stress test of individual banks in 2014, work that led to the introduction of more stringent capital requirements, and helped pave the way for two waves of so-called macroprudential regulation to prevent risky categories of loans.

Concerns were raised on Friday that more restraints may be needed, with analysts at Citigroup warning that a build-up of property risks could derail the economy as borrowers are overwhelmed by the burden of serving debt.

According to Citi, some 1.9 million investment properties could also come under pressure to be sold as speculators with multiple properties or  nearing retirement rush to sell as prices slide.

Citi says the traditional response of investors to ride out a downturn was now less viable because of high debt levels, particularly among investors aged in their 50's and 60's.

The analysis of Digital Finance Analytics data revealed a surprisingly high level of property speculation, with around 12 per cent of residential investors owning six or more properties, a risk factor also highlighted by the Reserve Bank on Friday.

Martin North, co-author of the report and principal of Digital Finance Analytics, an independent consultancy, said regulatory attempts to curb an estimated $680 billion of interest-only mortgages had come too late.

Mr North said prospect of rising interest rates, stagnating incomes, record levels of household debt and weakening sentiment are coalescing to increase the vulnerability of lenders and borrowers to interest only. "The risk chickens are coming home to roost," he said.

Household consumption contributes to about 55 per cent of gross domestic product. "A highly indebted household sector brings a whole new risk profile to the economy," the report concludes.

JPMorgan economist Ben Jarman described an RBA stress test as a "somewhat unusual development, given the separation of powers between the RBA and APRA," and it remains to be seen how this information will guide prudential settings.

"Is it to guide policy design choices on bank capital (normally APRA's domain?) Or is it to view the feedback loop effects of other prudential decisions already taken, or being considered?"

The central bank cited Tax Office data showing lower-income households running up losses on their properties to take advantage of negative gearing, and increases in indebted investors over 60 years old, and a sharp rise in borrowers with multiple properties.

"Given the strong growth in investor housing credit and riskier types of borrowing over this period, investors with multiple properties have likely contributed to higher risk."

The report also included a study of housing markets with similar characteristics to Australia. In New Zealand, Canada and Norway property prices have also surged while households have taken on more debt. Authorities in these countries had also resorted to "macro-prudential" measures aimed at managing financial stability risks.

While the measures appeared to work to some degree, the RBA said it was "difficult to assess" their effectiveness, and that the impacts tend to "diminish over time".

In some regions, house price growth and debt levels "continue to grow rapidly" so risks persist"

Macro-prudential policies, it said "can at best moderate the growth of credit and prices for a while but they cannot address the high levels of debt and prices".



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