Australia ranked number 2 financial centre in the World

Australia’s financial system has been praised by the World Economic Forum, jumping in economic ranking from 11th to 2nd, with the UK in first place, and nudging the US into third place.
The World Economic Forum ranks 55 of the world’s leading financial systems and capital markets.
Australia’s rise in position in the World Economic Forum’s rankings as a global financial centre are based on over 120 variables including institutional and business environments, financial stability, and size and depth of capital markets.
The financial crisis caused most countries’ ratings scores to drop significantly, but Australia was an exception.
According to James Bilodeau one of the authors, Australia was the only country in the top 10 to have a positive change in its overall score.
“Australia performed very well across many of these different areas” he said.
So certainly financial stability while there were some distresses in the system, we see strength in the banking system, certainly from a sovereign debt point of view, and then general strength across other areas – the banks are extremely efficient according to the measures that we’ve captured,” he said.
“We scale size by GDP as a measure of depth, Australia does well here, and then financial markets very strong.”
According to Mr Bilodeau it is a surprising achievement, for a relatively small country like Australia to trump the US in the rankings.

Both the US and the UK did poorly on financial stability – London coming in 37th and New York 38th out of the 55 countries.
“In terms of this snapshot, sort of looking at the relative placement of countries, certainly the US and the UK have both lost ground,” Mr Bilodeau commented.

Australia is the place to invest your money right now

Many people are also noting Australia’s surprisingly strong September jobs figures.

Australia is the place to invest.

Richard Cookson the head of global asset placement for HSBC said that Australia was the place to invest.
Author: Rick Adlam Mr Mortgage

Australians love to hate the banks. That’s a given. But is there good reason to distrust your bank when it comes to mortgage rates you are being charged?

According to Peak consumer group Choice, Australia’s major banks have been inconsistent when setting their mortgage interest rates [that is ripping off it's customers when the opportunity presented]. The four major Australian banks announced yesterday they will lift their standard variable home loan rates by 0.25 percentage points in line with the official cash rate increased announce this week by the Reserve Bank of Australia.

Australia is the first Nation to have its Central Bank raise interest rates since the Global Financial Crisis hit last year, and this is a good sign that the RBA bankers believe that the worst is over in Australia, and now the focus is on putting a lid on inflationary pressures, especially in housing markets.

Sauce for the Mortgage Goose

As the Choice spokesman Christopher Zinn pointed out, because the banks did not pass on the full amount of earlier rate cuts, because they said that the cost of funding was not tied to the cash rate. He says the same principle should apply when the cash rate increases. [Good Luck on this one Chris. The logic is sound, but without anyone to go in punching for you, you have Buckley's chance of moving the banks.] “The banks really should just have passed on part of this increase in the cash rate and not the full 0.25 per cent if they were going to be consistent with their argument that the cost of funding was not just related to decisions made by the Reserve Bank,” he said.

“If that really was the case [concerning mortgage interest rates] then you would think it would be the case now and  this exposes the inconsistency of their argument in the first place.”

The ANZ was first bank in line to raise its standard variable rate, which will now be 6.06 per cent per annum, equivalent to a 6.16 per cent comparison rate. From the same date, the NAB will lift its standard variable home loan rate to 5.99 per cent per annum, and Westpac will lift its rate to 6.06 per cent. The Commonwealth Bank will raise its interest rates a day later, on Tuesday October 13, taking its ‘Complete Home Loan’ variable rate to 5.99 per cent per annum.

The real reason Australians get ripped off every chance the Big banks get.

In my view, the banks don’t have to be consistent when it comes to decisions on what to charge their customers for mortgage finance. There is no law that says they should, and there is no real competition in the mortgage space in Australia. We have had a shrinkage of mortgage brokers and many non bank mortgage lenders being taken over in the wake of the GFC. What we need I believe is more real choice. And more real competition to break the power of what I see as Australia’s banking Cartel.

Author: Rick Adlam, Mr Mortgage

NewCommercial mortgages for Real estate trusts

Debt refinancing using commercial mortgages will be available real estate investment trust sector soon.

High borrowings were the main source of problems that caused the collapse of the property market in late 2007. Despite this recent successful raisings by trusts indicate that credit markets don’t see a problem.

Analysts say the attraction of commercial mortgage-backed securities (CMBSs) for the REITs is that they allow a diversification for refinancing.

The downside is that they are secured against the assets. That has been reflected by the debt stalemate of the past year, as the trusts had to sell assets to unwind the CMBSs. But this was impossible, given the falling value of the underlying assets.

The head of real estate investment banking at Citi, said the recent issues demonstrated the continuing easing of restrictions in credit markets and provided good diversity from the traditional, and expensive, bank debt, which remains mostly frozen.

Macquarie CountryWide Trust has just completed the first Australian issue of CMBSs in two years, selling $265 million of notes.

Strong investor demand resulted in $225 million being issued at a margin of 410 basis points, together with a further subordinated tranche of $40 million.

The securities have a three-year term, with an option to repay after two years.

As a result, the trust has fully repaid the 2006 Australian dollar CMBS notes, using proceeds from the new issue, cash from recent asset sales and funds drawn from a debt facility.

The new securities, arranged by National Australia Bank, will have a AAA rating assigned by Fitch Ratings and Standard & Poo

Debt refinancing using commercial mortgages will be available real estate investment trust sector soon.

High borrowings were the main source of problems that caused the collapse of the property market in late 2007.  Despite this, recent successful procurement by trusts indicate that credit markets don’t see a problem.

Analysts say the attraction of commercial mortgage-backed securities (CMBSs) for the REITs is that they allow a diversification for refinancing.

The downside is that they are secured against the assets. That has been reflected by the debt stalemate of the past year, as the trusts had to sell assets to unwind the CMBSs. But this was impossible, given the falling value of the underlying assets.

The head of real estate investment banking at Citi, said the recent issues demonstrated the continuing easing of restrictions in credit markets and provided good diversity from the traditional, and expensive, bank debt, which remains mostly frozen.

Macquarie CountryWide Trust has just completed the first Australian issue of CMBSs in two years, selling $265 million of notes.

Strong investor demand resulted in $225 million being issued at a margin of 410 basis points, together with a further subordinated tranche of $40 million.

The securities have a three-year term, with an option to repay after two years.

As a result, the trust has fully repaid the 2006 Australian dollar CMBS notes, using proceeds from the new issue, cash from recent asset sales and funds drawn from a debt facility.

The new securities, arranged by National Australia Bank, will have a AAA rating assigned by Fitch Ratings and Standard & Poor’s.