AFR: Banking Summit 2022 News Feed

The latest from Banking Summit 2020. More available from the AFR website.

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More financial services protections under Albanese: Gilbert + Tobin partner

John Kehoe

The new Albanese government will embed more consumer protections into the financial services sector, according to Gilbert + Tobin partner Richard Harris. He says the buy now, pay later sector will be “reined in”. ASIC’s Ms Bird said the new government would probably focus more on consumer protection on crypto.

8 mins ago – 1.58PM

Financial scams rising: ASIC

John Kehoe

Australian Securities and Investments Commission executive director Joanna Bird warns financial scams are a big problem for consumers.

The banks have an important role to play to protect customers, she said.

“Scams are a very, very significant issue. Huge increase in financial scams because of the pandemic period.

“Dealing with scams is going to require really significant collective effort.

“I do think banks have a really particular role to play in this space.”

27 mins ago – 1.39PM

Only ‘tiny’ part of crypto sector regulated

John Kehoe

Back to the Summit, Gilbert and Tobin partner Richard Harris says only a “tiny” part of the crypto sector is regulated.

“There is only a relatively tiny proportion of what’s happening in crypto is actually regulated.

“So you have an enormous amount of markets dealing with value characterised with absolutely no overarching or very minimal regulation.

“What could possibly go wrong?”

28 mins ago – 1.38PM

Labor inches towards 77 seats

Georgie Moore

Labor MP Fiona Phillips is ahead of former Liberal state minister Andrew Constance in the NSW South Coast seat of Gilmore, putting the Albanese government on track for 77 seats.

There are 222 seats between the incumbent and Constance, according to the Australian Electoral Commission’s vote tally, putting Phillips on a two-party preferred advantage of 50.1 per cent to 49.9 per cent.

Earlier, Prime Minister Anthony Albanese referred to Phillips as “77”.

“Fiona rang a magnificent campaign. If she gets across the line no-one’s allowed to call her Fiona anymore. We’ll just call her 77,” he said.

“But it was a magnificent campaign by people fair to say, to use a footy analogy, the umpires didn’t really, you know, go with us all the time.”

34 mins ago – 1.31PM

Further interest rate rises will leave some borrowers in trouble: ASIC

John Kehoe

Australian Securities and Investments Commission executive director Joanna Bird tells the Summit if there is a significant increase in interest rates, “there will unfortunately be some borrowers that will get into financial difficulty.”

“And in a lot of circumstances, we really would expect the banks to work with those individuals to come up with tailored responses for them. To try and arrive at the best outcome.“

Bird said the banks could apply their experiences from the pandemic, when customers were given temporary relief.

Australian Prudential Regulation Authority executive director Therese McCarthy Hockey said the banks had passed stress tests for increases in interest rates and a fall in house prices.

1 hr ago – 12.47PM

Ai Groups calls for swift, targeted plan to deal with energy price rises

Georgie Moore

The Australian Industry Group warns “apocalyptic” energy price rises threaten to cause chaos for industry and influence pain on households.

Ai Group Innes Willox says some of Australia’s former energy strengths – legacy coal generation, gas resources and place in the export market – are working against it.

He wants to see a national, integrated and strategic response to deal with “extraordinary” price rises including a 50-fold spike in Victorian wholesale gas prices.

“The immediate pressures are from outages at old coal plants, consequent high gas demand for power, and the collapse of a mid-size gas retailer. But beyond these acute pressures lies the pull of international coal and gas prices, which are unprecedentedly high in the wake of the invasion of Ukraine,” Willox said.

He said the war in Ukraine was expected to sustain high energy pressures for years to come, especially in natural gas, as Europe looks at further steps to wean itself off from Russian energy.

“The price pain is already intense for those businesses who’ve found themselves suddenly needing new energy contracts amid local and global turmoil. Households will feel the punch from higher default electricity prices from July, and more pain is coming for all,” Willox said.

“The most sensible steps on both the supply and demand sides to build for the future and reduce our exposure to fuel costs will take time to deliver.

“Short-term responses to help vulnerable industry and households will also be needed. They should be swift, targeted and have a clear handoff as the benefits of longer-term measures are achieved.”

1 hr ago – 12.41PM

Banking Summit to return from 1.20pm

Campbell Kwan

It’s the lunch break at The Australian Financial Review Banking Summit.

The Summit’s will restart at 1:20pm with a panel consisting of APRA banking executive director Therese McCarthy Hockey, Gilbert and Tobin partner Richard Harris, and ASIC financial services and wealth executive director Joanna Bird.

The panel members will discuss navigating regulatory priorities and responses.

1 hr ago – 12.30PM

Afterpay hasn’t gone away: Simon Cant

Jonathan Shapiro

Now it’s the turn of the fintech investors and entrepreneurs to take the stage at The Australian Financial Review’s Banking Summit.

Among them is Simon Cant of Reinventure Group that, with financing from Westpac, made an inspired early investment in crypto exchange Coinbase.

These are tough times for start-ups after a sharp sell-off in listed tech company valuations.

“There’s still more firepower in terms of dry powder within the venture funds in Australia and in the US than there has ever been,” Cant told the Summit.

“So my experience is not that it’s drying up completely. I think there’s still plenty of investing happening. Terms are coming down, but it’s happening.

“We don’t think that’s where the biggest threat to the banks is coming from. We ultimately think that it’s companies that are building on existing network effects in other markets, or building their own network effect, in some ways based around finance. There’s some of the biggest threats.”

Zip, he said, had taken a massive haircut, as its share price has plunged about 85 per cent in a year while Afterpay has disappeared from view after it was acquired by Square (since renamed Block). But he says Afterpay has not gone away.

“The founders of Afterpay are now leading the charge for Block to become a super app. It’s got 80 million customers of its cash app in the US.

“We’ll see a bunch of those innovations translate to Australia. So, I do think the threat is potent. Has it gone away and being fended off? No, not at all”.

1 hr ago – 12.26PM

Climate protester ‘sick of CBA’s greenwashing’

Campbell Kwan

Another Climate 350 protester has asked a question at the Summit to CBA CEO Matt Comyn.

“I’m sick of CBA’s greenwashing and I’d really appreciate a yes or no answer,” the protester said.

He then asked whether CBA would cut funding to fossil fuel companies. Comyn said CBA has committed to the Paris Agreement.

“In terms of our exposure to fossil fuels, they’re less than 2 per cent of our balance sheet,” Comyn said.

“We have to act in the country’s overall best interests, which also means we have to make sure there’s a secure energy platform. This year, we will publish guide paths to make that one and a half degree energy transition.”

1 hr ago – 12.15PM

Young men interested in crypto despite price drop

Campbell Kwan

When asked about whether CBA will still push a crypto asset offering, Matt Comyn says the bank would have a “long debate and discussion” about whether it has value for customers.

“The sector itself, I mean, there’s a long tail of rubbish in there … we want to make sure that only people who understand the risks – and it’s an incredibly risky asset class and so for us, you know, developing product as opposed to just statements, target market determinations, effectively treating it like a financial product,” he said.

Comyn also said despite the rubbish, there is a lot of interest in crypto assets despite their prices dropping, especially among young men.

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