So, Australian Prudential Regulation Authority chairman John Laker believes Australian banks could survive ‘’a period of months’’ without access to global markets if global funding markets freeze as a result of the turmoil in Europe. That’s not exactly reassuring.
In fact the major banks themselves believe they are holding sufficient liquidity, have termed out their wholesale borrowings sufficiently and have displaced sufficient wholesale debt with customer deposits to survive quite a lot longer than that.
Laker’s comments during his regular appearance before the Senate Economics committee, however, do point to renewed concern within the banking regulator about the potential for another flashpoint in the ongoing instability within the global financial system since the initial crisis erupted in 2007, what Laker described as a ‘’roller coaster ride’’ in financial markets, which was again on a downwards swing after the Greek and French elections and the banking crisis emerging within Spain.
Laker’s checklist for the Australian bank’s prudential health has a number of ticks.
They are solidly profitable; they are holding historically high (indeed very high) levels of (high quality) capital; the major banks have only ‘’very limited’’ exposures to the euro area countries under the most strain; the larger banks have lengthened the maturities of their wholesale funding and they are holding a lot of liquidity. The majors have also established a market for covered bonds and retain significant headroom to issue more and have access to repo transactions with the Reserve Bank if necessary.
Despite all that, Laker believes that any break-up of the euro area or a European sovereign or banking default would create market turmoil and would impact on the major banks because of their continuing, albeit reduced, exposure to global funding markets.
He’s less concerned about domestic threats, saying the prospect was for near-trend growth in the Australian economy in 2012 and 2013, the terms of trade remained high, inflation and unemployment low and the fiscal position strong.
That’s true of the economy overall, although the recent spate of company collapses, significant and continuing job losses, the depth of the anxiety and risk-aversion among consumers and sliding house prices might be emerging issues of concern.
The majors showed in 2008 that, with some assistance from the federal government in the form of the funding guarantees (which they paid for), they were able to weather that storm. Today they are in far stronger shape to cope with a reprise of that seizure in global markets after the Lehman Bros collapse.
The Australian corporate sector generally, with some exceptions, is also in better shape. It has less debt, particularly short-term debt, and more liquidity. Historically the biggest threat to the banks has been their commercial property exposures, but they have reduced their lending to that sector, which has itself reduced its gearing.
If house prices were to continue to slide and unemployment were to escalate as the non-resource economies continue to splutter, however, that might cause the banks some issues, although it would take very large spikes in both to create a material threat.
Earlier this year an IMF working paper looked at the Australian majors through a novel lens, asking what would happen if the Irish experience of an unemployment rate of 13.6 per cent and a near halving of house prices from their pre-crisis peaks were to occur here. They concluded that the majors’ tier one capital ratios would fall by only 1.5 percentage points and remain above the regulatory minimum.
The only scenario where the majors would need to raise new capital would be if their peak corporate loan loss experience of the original crisis –about six per cent of their corporate loan books – were to be repeated in tandem with that surge in unemployment and crash in house prices.
Earlier this month an IMF team arrived in Australia to undertake a rather more formal stress-testing of the majors, so there’ll be another check on the battle-readiness of the system.
Laker did point to another potential source of risk. With minimal growth in demand for credit and the deposit wars maintaining pressure on their margins, the banks’ earnings growth has flattened and their returns on equity are subsiding. There is some potential that a bank or banks might succumb to pressure from the market to chase higher earnings by taking on more risk.
The way Laker put it was that ‘’in this environment strategic ambitions will be crucial in determining how ADIs (authorised deposit-taking institutions) maintain their financial strength and profitability in a durable way and these discussions are a key topic in APRA’s regular discussion with boards and senior management.’’
APRA is known to have, among other issues, let the banks know it would be concerned if, for instance, they were to relax their loan-to-valuation ratios to try to drive more housing loan volumes.
It showed itself to be a vigilant and proactive banking regulator ahead of and during the financial crisis. One assumes it wants to maintain that reputation which, along with the actual resilience of the banks, may yet be tested again if the European authorities can’t devise or agree on a formula for stabilising the eurozone and averting the threat of a destructive fracturing of the eurozone, with banking and sovereign debt defaults, that would give the global financial system an even bigger shake than it experienced in 2008.
Petrol costs: Greening may force retailers to pass on price cuts - BBC News
Transport Secretary Justine Greening has said she will consider legislation to force petrol retailers to pass on cuts in the wholesale price of fuel.
The Department for Transport says pump prices paid by motorists have fallen by just 7p despite a 10p fall in wholesale prices since April.
Ms Greening told the BBC she would consider taking further action to ensure motorists "get a better deal".
But petrol retailers said her remarks showed a "lack of understanding".
Petrol prices have fallen back since hitting record levels in March, when unleaded rose above £1.40 a litre.
'Blurred world'The AA said wholesale costs across northern Europe had dropped more than 16% during May, but petrol retailers had been slow to pass this on to motorists.
Its president, Edmund King, welcomed Ms Greening's comments, saying: "Over the past seven years we have asked governments to act against the blurred world of UK pump prices, which every driver knows shoot up like a rocket and fall like a feather."
A Department for Transport source told the BBC the industry would have a matter of weeks to come up with a voluntary code of conduct to ensure wholesale falls were passed on within a fortnight to the motorist.
But if a scheme could not be agreed, he indicated the government would look at legislation, although the source was unable to say how long that might take.
Ms Greening told the BBC she wanted a voluntary scheme to be agreed.
She said: "That's what we're going to look at first, but if that doesn't work we will look at some of the things other countries have done like Germany, Austria and Denmark, who have taken more mandatory action in this area.
"I'm really determined that motorists get a better deal."
VAT callShadow transport secretary Maria Eagle said: "Petrol stations should be lowering their prices when wholesale costs of fuel fall, and it is unacceptable if they are refusing to do so, especially when they are quick to pass on any increase.
"Ministers must also accept their share of responsibility for eye-wateringly high prices at the pumps thanks to their decision to hike VAT on fuel."
She added: "Ministers should temporarily restore the lower rate of VAT to fuel to give much-needed relief to households feeling the squeeze, as well as acting to ensure price cuts are fully passed on to motorists."
Brian Madderson, chairman of the Retail Motor Industry Federation's petrol division, said: "Suggestions that the falling price of oil and wholesale price movements on the continent should dictate further pump price cuts across the UK by independent forecourt operators is damaging to this struggling sector and shows lack of any real understanding of fuel price mechanisms."
Shopping around too tiring? Use smartphone - Yahoo Finance
Melanie Sheridan doesn't do much shopping these days without her smartphone. As a work-at-home mother and the creator of the blog "Mel, A Dramatic Mommy," Sheridan says she relies heavily on her phone to organize her household shopping and keep a close eye on her spending.
"I've been on a serious mission to slash our grocery budget," says Sheridan, who lives with her husband and son in San Diego. "Now that I've got an iPhone, I told my husband it will start paying for itself in terms of savings."
Tech-savvy, price-conscious consumers have hundreds of mobile phone applications to choose from. Sheridan says she's shaved about $50 off her family's monthly grocery bill by using a combination of five different smartphone shopping apps. Sometimes the savings come from something as simple as making a list and sticking to it. But she says the real household budget help comes from smartphone apps for comparing prices.
Apps take legwork out of comparing prices
Amazon Price Check is one of Sheridan's go-to apps for retail items because it allows her to see if better prices are available online while she's shopping in a store. She scans item barcodes with her phone's camera or types product names into the app's search bar to compare the store's prices to those offered by Amazon and its merchants.
ShopSavvy, Google Shopper and eBay's RedLaser are comparison-shopping apps that work in similar fashion but show prices charged for a particular item across the Internet and at other local stores.
If you're having trouble finding a store selling what you're looking for, apps such as Goodzer can help you source almost any consumer item, whether it's available at a chain store or local mom-and-pop shop.
The Consumer Reports Mobile Shopper allows you to instantly compare prices from both online merchants and local brick-and-mortar stores, plus it shows you the product reviews and insights the magazine is known for.
Shop around for a shopping app
The Consumer Reports app has an annual fee, $4.99 a year, while the others mentioned so far are all free. Often, you won't have to open your wallet for a great app that will save you money.
"When it comes to apps, the adage that you get what you pay for is really irrelevant as a litmus test for consumers to decide if they want to install an app," says Ryan Ruud, a digital media expert in Minneapolis who calls Target's free shopping app his "lifeline."
Ruud says plenty of great free smartphone shopping apps are available, often supported by advertising or provided by a particular store hoping you'll shop there. But understand that while a retailer's branded app may offer the latest deals and list-making features, it likely won't tell you if a competitor has a better price. So it's worth shopping around for the right app before you start doing the real shopping around.
To find a quality app, Ruud advises consumers to look at the reviews in an app store. If an app has several hundred reviews or more and the ratings are high, he says it's probably good. Likewise, regular updates for minor fixes are a good sign the app's maker offers ongoing support. If you pick the wrong app, you can always delete it and find another.
Shopping and talking?
Siri, Apple's voice-recognition tool, has been something of a sensation since it was introduced for iPhone last year. Now a number of popular shopping apps advertise the possibility of speaking to your smartphone instead of typing in a product or scanning a barcode to do a price check. Unfortunately, the more cutting-edge you are, the more bugs you're likely to encounter. Voice-controlled shopping apps -- available for both iPhone and Android platforms -- are still in their infancy, with kinks still to be worked out.
Craig Agranoff, a technology reporter and co-founder of Grip'd, a Boca Raton, Fla., company that develops iPhone and iPad apps, says he's not quite sure Siri is a useful mobile shopping tool just yet.
"Voice for product searching seems to be a bit far off for now since you're really hoping that the operating system recognizes what you said properly," says Agranoff. If the voice app doesn't understand you, you'll be back to manually entering product information or scanning the barcode.
But Agranoff points out that the speed of innovation in the mobile-app space is intense, so better voice recognition is coming.
Caution on privacy
While free apps can certainly help you simplify your shopping and save, they also raise some serious questions about consumer privacy, says Aaron Messing, a lawyer who specializes in information privacy issues at OlenderFeldman in Union, N.J.
"If you have a smartphone, it knows everything about you," he says. "Consumers should understand what types of data they will be sharing when they use a particular app."
Read the terms of service before installing any app. Messing says you also need to ask: Will this app have access to my location, pictures, contact book, and voice or text communications? If so, when will it collect that information, and how will the app use it?
Even people who are extremely cautious about their privacy may decide the benefits of smartphone shopping apps are worth giving up some personal information for, he says. All experts stress that whether a shopping app is free or costs you something, it will track your shopping habits because that's often how customized deals are targeted to specific consumers.
More From Bankrate.com
Wholesale Power Surges in New York as Temperatures Soar - Bloomberg
Wholesale Electricity Surges in New York as Temperatures Soar
Suzanne DeChillo/The New York Times via Redux
Keeping cool in Times Square.
Keeping cool in Times Square. Photographer: Suzanne DeChillo/The New York Times via Redux
Wholesale electricity jumped in New York as hot, humid weather from Massachusetts to North Carolina prompted homes and businesses to crank up air conditioners.
Spot power in New York City rose to an average of $339.82 a megawatt-hour from 7 a.m. through 3 p.m. after soaring as high as $1,647.56 at 10:55 a.m., according to the New York Independent System Operator Inc., which manages the state grid. Electricity traded yesterday for delivery for those peak-demand hours today was priced at an average of $57.34.
The high in New York today was 88 degrees Fahrenheit (32 Celsius), 13 above normal, while Baltimore reached 96, according to the National Weather Service. Humidity in New York may rise as high as 93 percent later today, said AccuWeather Inc. in State College, Pennsylvania.
“Today’s demand is expected to be up with the heat and humidity, but power supplies are more than adequate to meet that demand,” Michael Clendenin, a spokesman for Consolidated Edison Inc. in New York, said in an e-mail. A cold front forecast to move in later today and tomorrow will “bring temperatures back to normal by the end of the week,” he said.
Most power for a given day is purchased the previous day in what is known as the day-ahead market. Spot prices can jump when demand exceeds the amount secured in trading a day earlier.
New York Grid
Hourly prices across the New York state grid rose above $100 a megawatt-hour after 7 a.m. with the start of the work day. Electricity use on the grid was 27,685 megawatts as of 4:54 p.m., 8.3 percent above yesterday’s forecast for that time.
“Temperatures are climbing to highs not experienced since last August,” David Flanagan, a spokesman for the New York grid operator, said in an e-mail. Demand response programs were activated to encourage large consumers to reduce consumption during peak hours, he said.
The New York ISO issued a thunderstorm alert to market participants just before 3 p.m., resulting in transmission bottlenecks and bolstering prices, said Brendyn Brooks-Stocking, a Boston-based Northeast power analyst with Genscape Inc., a real-time data power provider.
Today’s spot-market price gains won’t affect bills for Con Ed customers immediately because rates are set by contract, according to Clendenin. The utility has more than 3 million customers in New York City and Westchester County.
New England Prices
Spot power across New England rose to $429 a megawatt-hour at 3 p.m. after averaging $77.79 for the hour ended 2 p.m., based on gains in Connecticut and Western Massachusetts.
The high in Worcester, Massachusetts, may be 79 degrees, 9 above normal. Western Massachusetts power averaged $290.14 megawatt-hour from 10 a.m. to 2 p.m., or six times more than the day-ahead prices for that time, according to data from ISO New England Inc.
Demand on the mid-Atlantic grid operated by PJM Interconnection LLC, which spans 13 states from New Jersey to North Carolina and as far west as Illinois, was 131,099 as of 4:30 p.m., 6.6 percent more than the day-ahead forecast.
Prices have traded from lows that were mostly in the $20s and $30s per megawatt-hour to more than $600 in some of the more densely populated areas where transmission bottlenecks aren’t unusual, according to PJM data.
Public Service Enterprise Group (PEG)’s territory in New Jersey averaged $275 a megawatt-hour from 11 a.m. to 4 p.m., after rising to a high today of $451.75. Spot power at the Dominion Resources Inc. zone in Virginia and North Carolina jumped to $601.07 at 4:35 p.m. after averaging $213.38 from 1 p.m. to 4 p.m.
To contact the reporter on this story: Naureen S. Malik in New York at nmalik28@bloomberg.net
To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net
Can a pill stop you shopping? - Daily Mail
by CAMILLA LONG, Evening Standard
Film stars and sex, toddlers and telly, It girls and Gucci - there's an addiction out there that's just right for you.
Take shopping. It doesn't make you fat, nor does it kill you, unlike other fun stuff we could mention.
But it certainly hits the spot for sufferers from "aspendicitis", "plastic disease" or "Madame Bovary syndrome" (after the fictional heroine who liked to shop till she dropped).
An incredible eight per cent of the US population has been estimated to suffer from this newly fashionable disorder, but what's more amazing is that the drugs industry, always quick to spot a marketing opportunity, has formulated an "anti-shopping drug", which is now being prescribed by doctors in Britain.
Citalopram, manufactured in Europe by Lundbeck under the brand name Cipramil, is one of the family of drugs known as selective serotonin reuptake inhibitors (SSRIs), which also includes Prozac. It has recently undergone extensive tests at California's Stanford University which, it is claimed, prove its ability to stop people overspending.
"The drug seemed effective for nearly three-quarters of those who took it," explains Dr Lorrin Koran, who led the Stanford study and estimates that 90 per cent of sufferers from this obsessivecompulsive disorder are women.
"Many subjects found eventually that they could visit the shopping centre and not buy anything at all."
A lot of us find it difficult to leave the house, let alone visit the mall, without buying anything at all, so just where does harmless retail therapy end and compulsive shopping begin?
Dr Robert Lesever runs the Promis Recovery Centre with clinics in Kent and London and provides therapy for shopping addicts.
"A compulsive person becomes dependent and uses shopping to alleviate emotional problems," he explains, but the spree which "medicates" these problems provides only momentary relief. It's only a matter of time before the sufferer becomes hooked and their shopping begins to effect not just their bank balances, but their relationships.
But with inappropriate levels of consumer credit an everincreasing problem over here, will we soon be prescribed Cipramil with our debt counselling?
Dr Lefever is doubtful, and advocates a proper course of therapy. He says, "Emotions are never properly cured by drugs. You can't just medicate everything."
But other psychiatrists working in the field testify that Cipramil is noticeably more effective at treating shopping addiction than Prozac, for instance, which is also used to medicate obsessive-compulsive disorders.
Dr Neil Brener, a consultant psychiatrist at the Priory, north London, is a specialist in shoplifting and shopaholics. He has successfully used Cipramil alongside therapy to treat his patients, although he points out that, "since compulsive shopping is a genuine psychiatric problem caused by many different factors, in some cases citalopram will be more helpful to curb it than in others".
He welcomes the Stanford research, which confirms his own clinical experience.
With the conclusion of that research, Lundbeck and US manufacturers of the drug will be free to market their product as the world's first chemical overdraft excluder.
Below, three shopaholics reveal their experiences of Cipramil.
Luke, 21, medical student
LUKE decided to take Cipramil after his shopping habits led to suicidal thoughts. He stayed on it for three months. He says:
"I've always had a slight problem with spending too much, but when I came to university it got worse. I'd buy tons of clothes, CDs and computer equipment and feel a physical thrill when I paid for it. I even bought some vinyls without owning a record player - don't ask me why.
"The strain of work and personal relationships meant that increasingly I would try to cheer myself up by buying things - and, in the end, I couldn't go into a shop without making a purchase. I couldn't escape the craving for the high that shopping gave me, and the debts piled up.
"I started getting so worried about it that I contemplated suicide. That was the wake-up call. I confided in a friend and she said I should see my GP immediately. I was scared what might happen if I didn't.
"He said Cipramil would stop me feeling depressed one minute and compensating for it by shopping the next. The drug doesn't kick in properly for about a fortnight. To start with, I had mild, bearable stomach cramps. When I finally felt the emotional effects, my spending did stop a bit. I felt I didn't need that high when I handed over the credit card.
"I felt so much better on the drug that after a short while I wanted to come off it and get on with my life drugfree. My doctor was happy with my decision, so didn't prescribe any more. I had no problem coming off it, and I didn't start feeling depressed again. But soon my old habits came back - and I suddenly found myself blowing £600 on clothes. Three months on, I'm sorry that I still spend, but I don't have suicidal thoughts about it, and that's the main thing."
Christelle, 26, sports shop manager
Christelle's doctor prescribed her Cipramil in a last-ditch attempt to curb her addictive behaviour. She says:
"For seven years, I was addicted to shopping. I've got an emotional illness which finds relief in addictive behaviour, and shopping was one form of this.
"I became hooked on it when I was 18 when I got my first store card. I discovered it could momentarily relieve anxieties about my life. Eventually, I was running up debts of hundreds a month. I found that paying for luxury items gave me a particular high. I started seeing a psychiatrist who was prescribing me every drug under the sun to try to eliminate the compulsive urges. So when he suggested Cipramil, I thought, why not? I reckon I was on about 15 different pills a day by then, so I guessed it wouldn't make a difference.
"But it had a very strange effect on me. I don't know if this was due to all the other drugs I was on, but it knocked me out, and I could hardly move. So I suppose it did cure me of shopping - I couldn't get out of the house.
"After about six months on the drug, I had had enough and I wanted to purge my system. I didn't think it was doing me any good, and I felt awful. My doctor was still worried about my problems but understood my wish to try a different approach.
"I came off it and went straight back to the spending. Only when I tried a 12-step programme of therapy did I register improvement with everything - a vast improvement, because, two years on, I'm not on any medication at all and I feel normal.
"I still get the impulsive urges to go shopping, but I have learned to control them mentally. I'd never go back to the pills now."
Anya, 32, singer
Anya has been on Cipramil for a year, although she is trying to come off. She says:
"I didn't do anything about my shopping problem for years, because I lived so far away from my GP. I'd just go out and buy things for a buzz - mainly food, alcohol and clothes - and simply could not stop shopping. But at the end of the day, I'd get home and just leave the purchases in the corner of my room, still in the bag.
"I remember trying to explain to friends the moped I'd bought. I didn't have a licence!
"I can't believe I didn't make the effort - I knew perfectly well I had a problem, because I was utterly embarrassed by my behaviour. I moved house and went to a GP who referred me to a psychiatrist. He prescribed me a new drug - Cipramil.
"The side-effects were a problem, although the lure of buying things diminished. I found I could go into shops and come out after a few minutes instead of hours. I experienced nausea for the first 10 days, although it wasn't terrible.
However, I made a mistake when I didn't cut down on my alcohol. One evening I was enjoying my favourite drink - an alcopop - when suddenly I felt very sick, and very drunk. Worse than this, my libido vanished.
"I wanted to try to come off the drug to prove that I could survive without medication and to get my sex-drive back. My doctor reduced the dosage, but it coincided with a bad time in my personal life and I started having panic attacks. This was unusual as I'd felt under control when I was on the drug.
"My doctor explained that I didn't have to come off it at exactly that time, and I decided to stay on it for the time being. I don't like being dependent on it - but it's better than being utterly dependent on the shopping."
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Wholesale Christian Products - Witness Wear That Sells Quick! - PRLog (free press release)
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MP backs bid to draw in shoppers - wirralnews.co.uk
BIRKENHEAD MP Frank Field has added his voice to a campaign launched by the Grange and Pyramids shopping centres aimed at promoting the town.
Derek Millar, commercial director at the shopping centres, said We Love Birkenhead would bring retailers and residents together to spread the message that Birkenhead was "a fantastic place to live, work and shop".
The campaign will draw on support from celebrities, sports stars and business leaders with a link to Birkenhead as well as community stalwarts.
Like many town centres Birkenhead has suffered during the recession, with the demise of major chains like Woolworths and Peacocks and other big names like Currys and Topshop closing their stores to concentrate on branches in out of town retail parks – but Mr Millar said the future was "looking very bright".
The shopping centres recently had a change of ownership and are now being managed by LaSalle Investment Management.
Mr Millar said: "With so much doom and gloom in the news these days, we wanted to find a way of celebrating the many positive things about the town and community, which is a home and workplace to so many people.
"The new company is very committed to looking at a long term and solid strategy for the future of the shopping centres.
“Our campaign is all about celebrating the many virtues of the town and underlining how important the shopping centres are to the community they serve, not only as a place to buy the things you need but also as a social hub and major employer.
“It is an exciting time to be part of the team here and the future is looking very bright indeed.”
Mr Millar said Birkenhead's new Asda store had been a "positive development" and there was more to come.
He said: "In the last week, Next has opened its new, extended children's wear section, which has created three new jobs and gained the store an extra 2,000 square foot of trading space. It has also signed a ten-year lease underlining its commitment to the centre for the next decade.
"Poundland has opened a new store in the former Peacocks unit which is creating 19 new jobs for the town.
"We are also very close to signing up a new retailer for the former TJ Hughes store and terms have been agreed with two retailers for the former Currys unit.
"The new Asda store has, in many ways, been a positive development for the centres because it has brought new customers into the town which we have benefited from. The key aim for us is to make sure we continue to encourage those customers to the Grange and Pyramids and we will achieve this by continuing to offer a good mix of retailers and services which make us different to other shopping centres."
Mr Field said: "My affection for Birkenhead, since I came here more than 30 years ago, has always been the same. I have always had this sense that it is a place where people feel a very strong sense of identity.
"The people here are very proud of their town and while they like Liverpool, they love Birkenhead and that message has always been very loud and clear.
“I can’t tell you how pleased I am to hear there has been a change of ownership for the shopping centres and to hear about their commitment to a duty of care in the long term."
Mr Millar added: "The long term plan and focus is to continue to build on the great range of shops, both individual and well-known high street names, which we have at the centres, coupled with a terrific range of eateries.
"This varied mix of retailers and restaurants is what keeps our loyal customers coming back and we are working very hard to continue bringing in new businesses for our shoppers to choose from."
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