Stevens: happy banks make big profits

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Reserve Bank governor Glenn Stevens says he would rather the major banks earn big profits than none at all.

The central bank governor was being quizzed by federal parliamentarians in Canberra on Friday over the last round of mortgage rate increases by the big banks.

All the major banks lifted their rates well above the Reserve Bank's 25 basis point increase, with the Commonwealth Bank almost doubling the increase.

The rate increases came at a time the banks collectively were making record profits, and rising every year.

But banks profit growth was no different from other large corporations, Mr Stevens said.

"If my choice is between banks with good profits and banks with no profits, I would choose the former every time," Mr Stevens said.

"We need to be careful not to forget the capital that is invested in these institutions."

He also said it was a reasonable presumption that several institutions were likely to raise there rates by more than the central bank's increases.

"We take that change in all the decisions we make," he said.

He also defended the banks' heavier reliance on deposit-taking to fund their lending needs, saying it was "prudent to do it".

He said since 2007, when the global financial crisis began and intensified with the collapse of Lehman Brothers in 2008, wholesale funding had become more "unstable and risky".

He said banks had "no choice" to shift their funding mix more towards deposit taking.

Asked if the big four banks were too big to fail, Mr Stevens said even the failure of a small entity could be quite disruptive if people panicked enough in a crisis.

He said banks were supervised intensively, and APRA was quite prepared on occasion to tell banks to meet the minimum requirement if it felt it was appropriate from an individual risk or systemic risk point of view.

"This is the nature of banks. It's a tricky area because banking is not just like any other business," he said.

"A bank failure, even a not so big bank, isn't just like the failure of another business, where someone else comes in, buys the assets, employs the people and everything else keeps going."

He said regulation was much more intrusive on a bank than on the average industrial company.

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储备银行行长Glenn Stevens说，他宁愿各大银行赚取比什么都没有了高额利润。

央行行长被被问及在上周五由大银行抵押贷款利率上升的最后一轮在堪培拉的联邦议会议员。

所有主要银行取消其利率远高于储备银行的25个基点增加联邦银行几乎增加一倍。

在加息是在一个时间进行集体决策，银行创纪录的利润，并逐年提高。

但是，银行的利润增长并没有从其他大公司不同，斯蒂文斯先生说。

“如果我的选择是与银行之间良好的盈利和银行没有利润，我会选择前者每一次，”史蒂文斯说。

“我们必须小心，不要忘了在这些机构的投资资本。”

他还表示，这是一个合理的假设，一些机构有可能提高那里比央行的增加幅度。

“我们采取的所有决定，我们做出的改变，”他说。

他还辩护，接受存款，以资助其贷款需要银行的依赖较重，称这是“谨慎地做”。

他说，自2007年以来，当全球金融危机开始，并与雷曼兄弟于2008年倒闭加剧，批发融资已变得更加“不稳定和危险的”。

他说，银行已“别无选择”，以接受存款转向更多的资金组合。

当被问及四大银行太大而失败，史蒂文斯说，即使一个小实体的失败可能是相当混乱，如果人们在危机中惊慌失措不够。

他说，银行监管的深入，和阿普拉有时很乐意告诉银行满足最低要求，如果它认为是从个人的角度系统性风险或风险点适当的。

“这是银行的性质。这是一个棘手的领域，因为银行不只是像任何其他业务，”他说。

“银行倒闭，即使是没有这么大的银行，是不是就像其他业务，在那里别人进来失败，买的资产，员工和其他一切人民不断前进。”

他说，监管是对银行更侵入比平均实业公司。

funnybird

Don't think people have problem with the profit per se. The problem lies in how the profit is achieved.