A review of things you need to know before you go home on Friday; RBA signals more cuts, unexpected early Vancouver tax impact, Bridgecorp echo, 4% bond, LendMe loss, swap rates dip again

The RBA issued its Monetary Policy Review today and has hinted the cash rate will drop towards 1%, all but signaling another cut in the next six months.

Access to credit must be becoming impossibly tight without top draw asset collateral? Debt rollover risk must rising as well if ever lower cash rates are a necessity of RBA focus.

The European bank that would suffer the smallest capital loss in a recession is DNB ASA, Norway’s biggest lender.

According to the financial regulator in Oslo, DNB did so well in the European Banking Authority’s stress test because lenders in Norway have less leeway to reduce the share of assets against which they’re required to hold capital. To ensure banks don’t get too creative, their use of risk weighting is limited by a floor that Norway’s regulator says adheres more closely to the principles that underpin the 1988 Basel I standards.

Basel in 2004 adopted a new policy -- Basel II -- allowing banks to calculate their risks internally. It also imposed a floor to prevent capital ratios from dropping too low. But implementation varied from country to country, with some interpreting the floor as a minimum capital level while others, including Norway, have viewed it as a floor that limits the freedom of banks to use internal models to reduce their risk-weighted assets. Read more

Where are Australian banks (building societies really), with a primary focus on low risk weighting residential mortgage assets, placed when it comes down to stress test capital adequacy? Depositors need to know, given the RBA's obvious panic provisions to save borrowers from default.

Bank note hoarding is noticeable in the UK. Read more

unexpected early Vancouver tax impact???

Really ? I thought that would be expected if you hit foreigners with a 15% tax. Surely the consequence of that is a drop in sales.

Also, do you agree that foreigners in Canada that would pay for this tax include foreign students and temp Visa workers? Not sure why you can't answer this one as you told me I was wrong before when I clearly wasn't. Simple yes you were right will suffice.

Who says taxing foreigner does not act. Mr JK ......where are you and all experts who said that taxing non resident buyers does not help.

What more proof. Everything in NZ is signalling government but.................ministers in our government are the most intelligent people and also ONLY Intelligent people. So.....

Oh so tax on foreigners do work. Surprised.

Will be interesting to see experts comnents and article in mefia and on this webside. Cannot expect anything for national government as will rubbish it as nonsense or it does not apply to NZ as does not suit their motive.

Wouldn't work in Auckland because we dont have mainland Chinese tentacles all over our residential housing. Cue Tui billboard.

They know it works, that's why they won't do it.

Does anyone know if John Key is still alive?
It like Weekend at Bernies when he appears. Same ol recording"at the end of the day we will do nothing.."

My concern now is that as Canada and Australia have now applied stamp duty up to 15% on all foreign buyers (which includes students and temp visa workers )

Does this mean an increase in demand for NZ property from foreigners ?

We have the lowest purchase tax in the world. Why wouldn't they shift from buying in vancouver to Auckland especially as National has rolled out the red carpet...and the media are trying to deny there is a problem by talking about :
resident v non resident
instead of citizen/permanent resident v foreign buyers

Per the latest LINZ report
8,751 foreign students and temp visa workers that bought a property and live in it
4,707 foreign students and temp visa workers that bought a property and don't live in it

13,458 total foreign student and temp workers purchases

13,458 × 1million average = 13 billion NZD approximately
(Assuming majority were auckland properties )

13billion spent with zero tax paid.
Are nz citizens that are struggling to buy their own homes happy about this ?

I don't know about kiwis struggling to buy but I know tnat there are 59 kiwis in Wellington that are happy with it and are basically destroying the future of NZ.

Short term gain, long term pain.

http://www.cbc.ca/beta/news/canada/british-columbia/working-immigrants-…

1billion a month. That's how much foreign students and temp visa workers spend on nz property
1,000,000,000 nzd
Remember linz report 13500 were foreign students and temp workers
13500 * 1m average = 13.5billion. Approx 1billion a month.

Slightly off topic but I think you'll find this article interesting David.

Panama Papers: Joseph Stiglitz quits as government adviser
http://www.bbc.com/news/world-latin-america-36992729

Mr Stiglitz and and Swiss anti-corruption expert Mark Pieth, who also quit, said government interference in their work amounted to "censorship".
"I thought the government was more committed, but obviously they're not," Mr Stiglitz told Reuters news agency. "It's amazing how they tried to undermine us."