The author has been described by News Ltd as an "iconoclast", "Svengali", a pollie's "economist muse", and "pungently accurate". Fairfax says he is a "Renaissance man" and "one of Australia’s most respected analysts." Stephen Koukoulas concludes that he is "85% right", and "would make a great Opposition leader." Terry McCrann claims the author thinks "‘nuance’ is a trendy village in the south of France", but can be "scintillating" when he thinks "clearly". The ACTU reckons he’s "an enigma wrapped in a Bloomberg terminal, wrapped in some apparently well-honed abs."

Friday, March 25, 2011

RBA cautions banks on Asian adventures

Well, no prizes for guessing who first made this argument. As reported by Banking Day today:

"RBA cautions on Asian adventures
25 March 2011 6:56am

In a section of the Financial Stability Review that can only have been written with the ANZ in mind, the Reserve Bank of Australia yesterday listed some of the “challenges associated with being a new entrant to a market and having less familiarity with local market structures.”

After noting that the collective exposure of Australian banks to Asia, excluding Japan, is less than eight per cent of all banks’ offshore exposure of A$650 billion, the RBA says “offshore operations can offer growth and diversification opportunities, but they also raise a number of risk management and other challenges that need to be carefully handled.

“The way in which banks structure their offshore investments can also have implications for how insulated the Australian operations would be from any problems emanating from overseas operations, and vice versa,” the RBA says.

Last week, ANZ formally upgraded its aspirational target for profit from revenues sourced from Asia (and Europe and America) to between 25 per cent and 30 per cent of earnings by 2017, or roughly double the current level of Asian profits for the bank."