Kieran Trass’ Post

Our latest Bulletin research article reflects on New Zealand's use of macroprudential policies over the past decade to reduce housing-related risks. Housing-related risks are a big focus for us here at Te Pūtea Matua, given that mortgages make up more than half of bank lending, and household debt is high compared to other developed economies. We found that loan-to-value ratio (LVR) restrictions have strengthened households’ financial positions and reduced risk within the financial system overall. Full research here: https://lnkd.in/dzsg6_5M

The financial sector issues and trends highlighted in this article are widespread across key sectors of the NZ economy. Addressing them will necessitate a comprehensive reimagining of NZ's economic system, including a focus on retaining a significant portion of generated wealth within the country. https://lnkd.in/gfQ7WGiz

We have recently published an Analytical Note - Beyond the crystal ball: forecasting non-performing loans by Senior Analyst Tyler Smith. This research investigates the relationship between non-performing loans and economic conditions to provide insights into the future health of New Zealand’s financial system.   Non-performing loans are where the borrower has defaulted on a loan and the lender, such as a bank, could potentially incur some losses. This note finds that macroeconomic conditions can be useful in forecasting the future path of non-performing loans. Learn more here: https://lnkd.in/g-iSs-js

Interest rates are on the rise, and here's why it matters for your future. But it's not all about higher payments. The new six-year bonds announced by the Republic of Cyprus signify a slight uptick in interest rates for the first two years. This change highlights the dynamic nature of financial planning and the need for timely, strategic decision-making. 📈 Initially, a 1.25% rate from the previous 1.00% might seem minor, but it's the principle behind it that counts. Why does this matter for you? - Understanding market trends enables better financial planning. - It's an opportunity to reassess investment strategies. - It underscores the importance of life and savings insurance in safeguarding your financial future. Remember, in a constantly shifting financial landscape, staying informed and adaptable is key. Whether you're securing a loan, planning for retirement, or considering investment options, it's crucial to align your strategies with the current economic climate. Interested in navigating these changes with confidence? 📥 Feel free to reach out to me directly; let's ensure your financial plans are as resilient as they can be. #Economouinsurance #FinancialPlanning #InterestRates #InvestmentStrategies #Insurance #EconomicTrends

𝐑𝐁𝐀: 𝐅𝐢𝐧𝐚𝐧𝐜𝐢𝐚𝐥 𝐬𝐭𝐚𝐛𝐢𝐥𝐢𝐭𝐲 𝐫𝐢𝐬𝐤𝐬 𝐫𝐞𝐦𝐚𝐢𝐧 𝐜𝐨𝐧𝐭𝐚𝐢𝐧𝐞𝐝 𝐝𝐞𝐬𝐩𝐢𝐭𝐞 𝐫𝐢𝐬𝐢𝐧𝐠 𝐚𝐫𝐫𝐞𝐚𝐫𝐬 The Reserve Bank of Australia (RBA) has identified challenging macroeconomic conditions and a modest ageing of the loan pool as the primary drivers behind the recent increase in arrears. However, the RBA said that financial stability risks remain contained, with highly leveraged borrowers – the households most at risk – representing a relatively small share of total housing lending, with very few loans estimated to be in negative equity. Despite ongoing budget pressures, which are expected to persist, inflation moderation is anticipated to provide some relief over time. 𝗥𝗲𝗮𝗱 𝗺𝗼𝗿𝗲: https://ow.ly/jtHj50SKCWi

The Reserve Bank of Australia has opted to keep the cash rate target steady, citing high inflation and economic uncertainty. This decision has dashed hopes for a rate cut this year. Despite this, businesses in NSW continue to grapple with a range of challenges, from sluggish consumer spending to soaring operating costs and intricate regulatory demands. We want to hear from you! What aspects of doing business demand immediate attention? Your insights will empower Business NSW to advocate on your behalf and unlock available assistance. Participate in our quick 7-minute survey to make your voice heard! Your input is invaluable in shaping policies and support mechanisms for businesses like yours. https://ow.ly/O2bR50Rz72M #BusinessCondistionsSurvey #NSWBusinesses #EconomicOutlook #BNSW

4 reasons why Australian Prudential Regulation Authority should adjust the 3% assessment rate buffer back down. 1. We are at or near the top of the rate rising cycle. Do APRA really believe the cash rate will head to 7.35%? 2. The data highlights we don't have a risky lending problem. ~5% of borrowers obtain a high DTI loan, down from nearly 25% a couple years ago. 3. Buffer rates should be counter cyclical - high when rates are low, and lower when rates are high. Rates are high today. 4. It is a restraint on trade that hurts families from accessing the credit they need to live their lives. Particularly in Sydney. A modest dial back to 2.5% makes sense today, with a further dial back to a neutral 2% buffer rate when interest rates begin normalising. With borrowing capacities being slashed by 30%+ and house prices near their peak level again - the unnecessary 3% buffer is forcing EQUITY/CASH holders to make up a larger share of the funding structure. That is, younger Australian's without access to 'Bank of Mum & Dad' are being left behind. Why? #fairgo #borrowingpower #economy #housingmarket

The April 2024 Bulletin has been released. It features articles on: • Assessing Full Employment in Australia • Cash Rate Pass-through to Outstanding Mortgage Rates • Bank Funding and the Recent Tightening of Monetary Policy • The Effect of Least-cost Routing on Merchant Payment Costs • Financial Stability Risks from Non-bank Financial Intermediation in Australia • Assessing Physical Climate Risk in Repo-eligible Residential Mortgage-backed Securities • The Private Equity Market in Australia • Migration to Public Cloud: Risks and Regulatory Requirements for Clearing and Settlement Facilities • China’s Monetary Policy Framework and Financial Market Transmission • Urban Residential Construction and Steel Demand in China Read the April edition: https://bit.ly/3vTuEEk #RBA #Bulletin #Economy #Banking #MonetaryPolicy #Payments #FinancialStability

Put the party pies on ice and postpone those rate-cut celebrations. The much-touted rate cuts we’ve been waiting for may not arrive until 2025. Here’s why rates could be staying higher for longer, and how to take action yourself. 🏡 https://lnkd.in/gYq-DrUC #wafinance #perthmortgagebroker #mortgagewesternaustralia #perthfinance #plbs #ezbizloans #betterfuture #thebrokerbehindyou #assetfinance #businessfinance #businesslending

The Reserve Bank of Australia has opted to keep the cash rate target steady, citing high inflation and economic uncertainty. This decision has dashed hopes for a rate cut this year. Despite this, businesses in NSW continue to grapple with a range of challenges, from sluggish consumer spending to soaring operating costs and intricate regulatory demands. We want to hear from you! What aspects of doing business demand immediate attention? Your insights will empower Business NSW to advocate on your behalf and unlock available assistance. Participate in our quick 7-minute survey to make your voice heard! Your input is invaluable in shaping policies and support mechanisms for businesses like yours. https://ow.ly/O2bR50Rz72M #BusinessCondistionsSurvey #NSWBusinesses #EconomicOutlook #BNSW