The Financial System Inquiry’s proposed changes to the banking sector may be cause for concern for some SMSF trustees, according to the SMSF Professionals’ Association of Australia (SPAA).
In a communication to members, SPAA explained the FSI has recommended that Australia's banks raise their capital levels to better withstand financial shocks and protect taxpayers from “costly” financial sector bailouts.
The FSI also recommended that the risk-weighting used by banks in calculating their capital ratios be adjusted to promote competitive neutrality between the large banks and their smaller competitors, SPAA stated.
“With the majority of SMSFs investing substantially in Australian equities, with many having a strong weighting to Australia's large banks, SMSF trustees may be concerned by the effect that Murray's recommendations may have on bank share prices and dividends,” SPAA stated.
“Australia's large banks have previously cited that increased capital holdings will hit their shareholders and increase borrowing costs for customers. However, SMSFs with a more diversified portfolio of banking stocks may see increased competiveness for smaller banks as a positive allowing these banks to achieve higher profits.”
SUBSCRIBE TO THE SMSF ADVISER BULLETIN
- 21 Aug 2016Risks flagged with real estate appraisal valuesBy Miranda Brownlee
- 21 Aug 2016Lawyer challenges ATO view on two fund strategiesBy Miranda Brownlee
- 18 Aug 2017ATO locks in details, addresses panic on real-time reportingBy Katarina Taurian
- 18 Aug 2017Data feeds unreliable for new reporting, says mid-tierBy Miranda Brownlee
- 18 Aug 2017Tax component confusion spurs potential tax liabilitiesBy Miranda Brownlee
- 18 Aug 2017Contributions triple in June quarter, survey showsBy Staff Reporter
- view all
- ATO locks in details, addresses panic on real-time reporting
The tax office has addressed several points of confusion with the new events-based reporting regime, locked in key deadlines, and outlined w...read more
- Data feeds unreliable for new reporting, says mid-tier
With an estimated 20 per cent of SMSFs still encountering errors from data feeds, one mid-tier firm believes the ATO should allow SMSF pract...read more
- view all