Treasurer Wayne Swan has a good op-ed in the WSJ in advance of the G20 Summit. It looks like our local institutions will be exempted from the Basel III liquidity tests on the basis of their domestic orientation, which would be a big win for them. To quote the FT:
"Most big Asian banks will be exempted from a global regulatory regime under the latest proposal for the industry from the world’s leading economies, which aims to prevent another financial crisis.
People briefed on the agenda for the G20 summit, which begins in Seoul on Thursday, said officials had concluded that global regulators should focus on big banks with global businesses, stripping out domestically focused institutions without the reach of the industry’s cross-border companies.
According to this criteria, many big lenders in countries such as Japan and China, with a limited presence abroad, will be exempted, leaving domestic regulators to deal with them as they see fit. But in a move that will disappoint some, the G20 is set to defer a decision on whether there should be a globally set capital surcharge for systemically important banks."
Also over at the FT, 20 of the world's most conservative economists argue in favour of lower financial leverage, lower returns on equity, and reduced system risks. Finally, Sydney University academic Dr Elvis Jarnecic contributes to this debate at the ABC's Drum.
