subscribe to our newsletter
AMP Capital calls for calm on credit crisis fears

AMP Capital calls for calm on credit crisis fears

Reporter
16 February 2016

Despite the 20 per cent drop in the Australian sharemarket since March last year, AMP Capital chief economist Shane Oliver said there is still reason to remain optimistic.

Mr Oliver said that while the current situation is in some ways "reminiscent of 2008 with tightening credit markets, bank shares under pressure”, another GFC-style credit and banking crisis is unlikely.

“Banks in the US, Europe and Australia are better capitalised now,” said Mr Oliver.

"US and European bank exposure to energy loans at around 2-4 per cent of total assets is a fraction of their exposure to housing loans, which were at the centre of the GFC."

New restrictions on proprietary trading have limited banks’ exposure to riskier corporate debt, Mr Oliver explained.

"The issues of low transparency and complexity that plagued the subprime mortgage market are not really an issue in corporate debt markets now," he said.

"So far we are not seeing any blowout in inter-bank lending rates relative to official interest rates in contrast to what we saw in 2007-2008 as bank funding costs soared."

AMP Capital also continues to have the view, he said, that a “US-driven global recession is unlikely, albeit with a 25 per cent probability”.

Read more:

CBA research points to potential planning disaster 

Trustees' take-up of global equities spikes 

AMP Capital calls for calm on credit crisis fears
smsfadviser logo
join the discussion

Do your clients plan to add additional members to their SMSF if the new six member limit is passed as law?

SUBSCRIBE TO THE
SMSF ADVISER BULLETIN

Get the latest news and opinions delivered to your inbox each morning

In this month's issue:

  • Time wrap
  • The tech bull run
  • From hobby to passion
  • Golden Years
  • An untimely reminder
  • Why change is so difficult
  • Key Strategies for equalising super