Dividends may be hit as APRA changes capital rules for 'too big to fail' banks http://www.smh.com.au/business/bank...for-too-big-to-fail-banks-20131223-2ztri.html Australia's big four banks will be forced to set aside billions more in capital to meet new rules designed to make them more resilient and less of a risk to the financial system. The Commonwealth Bank, Westpac, National Australia Bank, ANZ Bank must lift their buffers for absorbing losses by an extra 1 percentage point from January 2016, the Australian Prudential Regulation Authority said on Monday. The regulator will require the extra loss absorbency because it has determined the ''too big to fail'' major banks are ''domestic systemically-important banks''. I guess a 1% increase is better than nothing. No mention of the "bail in" legislation.
The question is, do you think the Australian banking system will last for another two (2) years without extra help, bail-in etc? Personally, I do not.
I must say I have often wondered how it would go if the Big 4 Banks (or the Government itself) acted in accordance with a Government Law/Regulation that triggered a 'Bail In'. Would that be unconstitutional in accordance with 51(xxxi) ? Any ideas? OC
They, the system, would probably argue that the terms were 'just' and so any challenge would be struck down. Consider also, a lot of the population believes that shares are valuable and a bail-in trade for bank shares would be acceptable.
