Australia Banks Hit With Tougher Capital Requirements

The video discusses new banking regulations requiring a 10.5% tier one capital ratio, a 150 basis point increase. This change aims to ensure banks are 'unquestionably strong' following a financial system review. The Big Four banks currently average 9.85%, with Commonwealth Bank at 9.9%. Home loans, making up 60% of bank lending in Australia, significantly influence these regulations due to lending risk concerns. Banks like Westpac and ANZ are confident in meeting the new benchmarks, with ANZ aiming to achieve this ahead of the 2020 schedule.

What is the new tier one capital ratio requirement set by the regulator Emperor?

• 10.5%

• 9.85%

• 11.0%

• 9.9%

Which bank is mentioned as having the lowest tier one capital ratio among the Big Four?

• NAB

• Commonwealth Bank

• Westpac

• ANZ

What percentage of bank lending in Australia is attributed to home loans?

• 80%

• 70%

• 60%

• 50%

Why is the regulator concerned about the current lending setup?

• It is outdated and not technology-driven.

• It focuses too much on international loans.

• It is too lenient on small banks.

• It does not reflect the concentration of lending risks.

Which bank believes it can meet the new benchmark ahead of the 2020 schedule?

• ANZ

• Westpac

• Commonwealth Bank

• NAB