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Trends in the Funding and Lending Behaviour of Australian Banks

Author

Listed:
  • Chris Stewart

    (Reserve Bank of Australia)

  • Benn Robertson

    (Reserve Bank of Australia)

  • Alexandra Heath

    (Reserve Bank of Australia)

Abstract

This paper describes the Australian banking system, highlighting ways in which it differs from other major banking systems. It draws together themes from previous work conducted at the Reserve Bank of Australia (RBA), and outlines the role the banking system plays in the transmission of monetary policy and the transformation of risk. The paper also discusses some more recent trends, including the increased focus on deposit funding and potential changes in the determination of lending rates due to changes in the pricing of risk. These trends are, in turn, being influenced by changes in the preferences towards, and understanding of, different types of risk by investors, banks' management and regulators.

Suggested Citation

  • Chris Stewart & Benn Robertson & Alexandra Heath, 2013. "Trends in the Funding and Lending Behaviour of Australian Banks," RBA Research Discussion Papers rdp2013-15, Reserve Bank of Australia.
    • Handle: RePEc:rba:rbardp:rdp2013-15
    as

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    File URL: https://www.rba.gov.au/publications/rdp/2013/pdf/rdp2013-15.pdf
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    References listed on IDEAS

    as
    1. Goggin, Jean & Holton, Sarah & Kelly, Jane & Lydon, Reamonn & McQuinn, Kieran, 2012. "Variable Mortgage Rate Pricing in Ireland," Economic Letters 02/EL/12, Central Bank of Ireland.
    2. Luci Ellis & Dan Andrews, 2001. "City Sizes, Housing Costs, and Wealth," RBA Research Discussion Papers rdp2001-08, Reserve Bank of Australia.
    3. Hatice Uzun & Elizabeth Webb, 2007. "Securitization and risk: empirical evidence on US banks," Journal of Risk Finance, Emerald Group Publishing, vol. 8(1), pages 11-23, January.
    4. Jason Allen & Robert Clark & Jean-François Houde, 2011. "Discounting in Mortgage Markets," Staff Working Papers 11-3, Bank of Canada.
    5. Bank for International Settlements, 2010. "Funding patterns and liquidity management of internationally active banks," CGFS Papers, Bank for International Settlements, number 39, december.
    6. Calomiris, Charles W & Kahn, Charles M, 1991. "The Role of Demandable Debt in Structuring Optimal Banking Arrangements," American Economic Review, American Economic Association, vol. 81(3), pages 497-513, June.
    7. Bank for International Settlements, 2013. "Asset encumbrance, financial reform and the demand for collateral assets," CGFS Papers, Bank for International Settlements, number 49, december.
    8. John Broadbent, 2008. "Financial market innovation in Australia: implications for the conduct of monetary policy," BIS Papers chapters, in: Bank for International Settlements (ed.), Financial market developments and their implications for monetary policy, volume 39, pages 114-125, Bank for International Settlements.
    9. Isabelle Ynesta, 2009. "Households' wealth composition across OECD countries and financial risks borne by households," OECD Journal: Financial Market Trends, OECD Publishing, vol. 2008(2), pages 1-25.
    10. Daniel Fabbro & Mark Hack, 2011. "The Effects of Funding Costs and Risk on Banks' Lending Rates," RBA Bulletin (Print copy discontinued), Reserve Bank of Australia, pages 35-42, March.
    11. Luci Ellis, 2006. "Housing and Housing Finance: The View from Australia and Beyond," RBA Research Discussion Papers rdp2006-12, Reserve Bank of Australia.
    12. Guy Debelle, 2004. "Household debt and the macroeconomy," BIS Quarterly Review, Bank for International Settlements, March.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Chris Stewart & Iris Chan & Crystal Ossolinski & David Halperin & Paul Ryan, 2014. "The Evolution of Payment Costs in Australia," RBA Research Discussion Papers rdp2014-14, Reserve Bank of Australia.
    2. José María Serena & Ricardo Sousa, 2017. "Does exchange rate depreciation have contractionary effects on firm-level investment?," BIS Working Papers 624, Bank for International Settlements.
    3. Luong, Thi Mai & Pieters, Russell & Scheule, Harald & Wu, Eliza, 2020. "The impact of government guarantees on banks' wholesale funding costs and lending behavior: Evidence from a natural experiment," Pacific-Basin Finance Journal, Elsevier, vol. 61(C).
    4. Thi Mai Luong, 2020. "Selection Effects of Lender and Borrower Choices on Risk Measurement, Management and Prudential Regulation," PhD Thesis, Finance Discipline Group, UTS Business School, University of Technology, Sydney, number 3-2020.

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    More about this item

    Keywords

    banking; composition of funding; financial crises; interest rates; supply of credit;
    All these keywords.

    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises
    • G2 - Financial Economics - - Financial Institutions and Services
    • E4 - Macroeconomics and Monetary Economics - - Money and Interest Rates
    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit

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