Philip Lowe Deputy Governor Central Bank Balance Sheets Assets, - PowerPoint PPT Presentation

12 July 2012 Presentation to The Economist Bellwether Series 2012 (Sydney) The Euro Crisis and the Financial System Philip Lowe Deputy Governor

Central Bank Balance Sheets Assets, per cent of GDP % % 30 30 Bank of Japan 25 25 20 20 European Central Bank 15 15 10 10 US Federal Reserve 5 5 Bank of England 0 0 1996 2000 2004 2008 2012 Sources: central banks; RBA; Thomson Reuters

10-year Government Bond Yields % % US 15 15 12 12 9 9 6 6 Germany 3 3 Japan 0 0 1962 1972 1982 1992 2002 2012 Sources: Bloomberg; Global Financial Data

AAA-rated Securities Issuance Based on Standard & Poor's ratings, 12-month rolling average US$b US$b 400 400 Public sector 300 300 200 200 100 100 Private sector 0 0 2000 2004 2008 2012 Source: Dealogic

Banks’ Price-to-book-value Ratios Log scale Ratio Ratio Australia 3.0 3.0 2.0 2.0 Non-Japan Asia 1.0 1.0 Euro area 0.3 0.3 2004 2006 2008 2010 2012 Source: Bloomberg

Private Sector Credit Growth Year-ended % % United States Euro area 15 15 0 0 % % Japan Rest of east Asia 15 15 0 0 -15 -15 2002 2007 2012 2002 2007 2012 Sources: CEIC; ECB; IMF; RBA; Thomson Reuters

Non-Japan Asia – Net Private Capital Flows Rolling 4-quarter sum US$b US$b 150 150 100 100 50 50 0 0 -50 -50 -100 -100 -150 -150 2006 2007 2008 2009 2010 2011 2012 Source: CEIC

Share of Business Credit Foreign-owned banks % % European 15 15 10 10 5 5 Asian North American 0 0 2002 2004 2006 2008 2010 2012 Sources: APRA; RBA

Australian-owned Banks’ Claims on Asia Share of consolidated assets, immediate risk basis % % 3 3 2 2 1 1 0 0 2003 2005 2007 2009 2011 Sources: APRA; RBA

Average Rates on Major Banks’ Outstanding Lending and Funding Spreads to cash rate, monthly Bps Bps 300 300 300 300 Lending rate 200 200 200 200 100 100 100 100 Funding cost 0 0 0 0 -100 -100 -100 -100 2004 2006 2008 2010 2012 Sources: APRA; Bloomberg; Financial reports; RBA; UBS Australia AG