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Trends in Banking Regulations After the Crisis Essay Example

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Trends in Banking Regulations After the Crisis

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Trends in Banking Regulations After the Crisis. The share of owner occupier housing loan approvals of the last five years increased from 60% to 82%. A major driver for the consolidation of the market share was because of the firms exiting from the market or due to scale of operations (Henry.Close of securitisation markets as well as constraints in other funding market5s have forced some of the smaller players in the sector to exit or scale back the lending process (Doan. Moreover withdrawal of some foreign banks form the Australian banking sector has added some dimensions to the changes. Increase in levels of impairment especially in lending portfolios has also forced some players to scale back their operations. Another significant change that occurred in the banking industry in Australia is the mergers undertaken in the banking sector (Banking regulation, 2010).

The global financial crisis has affected the profitability of many banks world wide. In Australia, the fall has been greatest for some mid-tier banks. To overcome the adverse situation, these smaller banks started to tighten the interest margins than the major banks. By the end of the year 2009, all major banks in Australia had increased the net interest margins by about 20-25 points higher than the pre crisis period (Henry.The financial institutions in the US are thought to be responsible to be heart of the problem that resulted in the crisis. The crisis has affected all major US banks critically. Many banks have collapsed and others were on the verge of collapse. The crisis has also affected European banks. Banks in US and Europe has been affected by losses in sub prime mortgage investments, leveraged loans, failed financial hedges, and conventional credit losses. Governments around the globe were forced to intervene in the financial systems to prevent a massive collapse. More than 200 billion dollars was freshly introduced into 20 major banks alone crisis has forced the respective governments to establish new rules so that such crisis will have no effect in the future. The governments are working out measures to reduce weakness in the regulatory frame work of banks and the in the instruments and methods used by bank supervisors. The likely changes are, banks will be required to hold large capital buffers, banks would be required to follow extensive disclosure requirements and introduce simpler products than complex ones. Securitization will become less. Trends in Banking Regulations After the Crisis.

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Bernanke,B.S, 2009, Financial Regulation and Supervision after the Crisis: The Role of the Federal Reserve, Retrieved 10 December, 2010,<http://www.federalreserve.gov/newsevents/speech/bernanke20091023a.htm>

Banking regulation, 2010, Retrieved 10 December, 2010, < http://knowledge.asb.unsw.edu.au/article.cfm?articleid=1105>

Bernanke, others working together on overhaul, 2010, Retrieved 10 December, 2010,< http://news.yahoo.com/s/ap/us_financial_overhaul>

Doan.C, Glanville.V,Russel.A,&White.D. 2006, Greater international links in banking- challenges for banking regulation. Retrieved 10 December, 2010, < http://www.treasury.gov.au/documents/1190/PDF/09_banking.pdf>

Freixas.X, 2010, Post crisis challenges to banking regulation, Retrieved 10 December, 2010,<http://www.econ.upf.edu/docs/papers/downloads/1201.pdf>

Global banking trends after the crisis. 2009. Retrieved 10 December, 2010, <http://www.dbresearch.de/PROD/DBR_INTERNET_DE-PROD/PROD0000000000242788.pdf>

Henry.K, 2010, Emerging from the Global Financial Crisis, Retrieved 10 December, 2010,<http://www.australia.to/2010/index.php?option=com_content&view=article&id=1529:emerging-from-the-global-financial-crisis-by-dr-ken-henry&catid=101:australian-news&Itemid=167>

Obama pushes new bank regulation , 2010, Retrieved 10 December, 2010,< http://news.bbc.co.uk/2/hi/8473294.stm>

Regulations, 2010, Retrieved 10 December, 2010,<http://www.federalreserve.gov/bankinforeg/reglisting.htm>

SunGard Identifies Ten Trends in Banking,2010, Retrieved 10 December, 2010,

<http://www.sungard.com/pressreleases/2010/ambit091410.aspx>

Towards Basel III? Regulating the banking sector after the crisis, 2010, Retrieved 10 December, 2010,<http://www.asiaing.com/towards-basel-iii-regulating-the-banking-sector-after-the-crisis.html>

United States Banking Regulation, 2010, Retrieved 10 December, 2010,< https://www.10ainvestigation.com/sites/detail.asp?market=91&id=42>

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