insto - Australian financial markets

Ratings agency Fitch says it plans a “more conservative approach” to the refinancing risk of Australian infrastructure debt. In a report released last week, Fitch said the global financial crisis was still “all too visible” in recent infrastructure financings, which were showing higher interest spreads. “The crisis has resulted in higher spreads, ranging from 200bp-350bp, and shorter matures, ranging from two to seven years,” the report said.

Macquarie’s admission that market conditions were taking a toll on performance saw shares in the investment back fall to a 12 month low last week. The investment bank’s chief financial officer Greg Ward was reported as saying that while it was too early to forecast implications for full year earnings, some of the bank’s businesses were battling uncertainty. Ward told a UBS conference that it was “too early” to evaluate the impact on full-year earnings. Macquarie posted a $1.05 billion profit for 2010 in April.

The unprecedented level of government response following the fall out of the global financial crisis (GFC) saw the global financial system undergo seismic transformation. As a result, some industry sectors have been permanently transformed.

Boston Consulting Group calls it the “regulation tsunami” set to overwhelm the world’s financial system. APRA says it is inevitable, but the local banking industry is wary and resistant. So how will the regulatory push play out in Australia, once all the shadow- boxing is done? By Lachlan Colquhoun.

On The one side, there is the Federal Government and the regulators. Australia needs to be a good G20 global citizen and move in concert with the rest of the world, to make the globe safe from future financial meltdown.

As part of our 2009 review, Insto caught up with Tony Cripps, Head of Global Banking and Markets, HSBC Bank Australia.

How has investment banking in Australia changed during 2009

As part of our 2009 review, Insto caught up with Craig Drummond, Chief executive, Australia, Bank of America-Merrill Lynch.

How has investment banking in Australia changed during 2009

RBA has increased the cash rate by 25 basis points as expected from 3.75pct to 4pct after its monthly board meeting today. This is a further modest step in RBA’s planned tightening cycle this year.

Insto editor Bernard Kellerman spoke to Paulo Maia, HSBC Australia's new CEO about his bank’s performance and, as an ex-debt capital markets expert, his views on where the domestic deals are heading.

Insto: Who do you see as your main competitors?

The treasurer has announced an extension to the Government's investment in Australian residential mortgage-backed securities. The Government will direct the Australian Office of Financial Management to provide up to a further $8 billion of support to new issuances of high-quality RMBS, depending on market conditions. This decision follows the near completion of the Government's $8 billion investment in RMBS announced in 2008.

Corporate Australia's balance sheets are now showing virtually no vestige of the credit crunch, but they are by no means home and hosed.