ANZ has voiced possible major impacts on banks should the “Basel IV” changes be enacted, warning that the new regulations could result in homebuyers suffering from higher prices.
The bank lender said in its submission to Treasury that the banks’ risk management and their pricing of consumer loans and deposits may see dramatic and negative effects, which could fall on the shoulders of Australian consumers.
The Basel Committee has earlier expressed its concerns of safeguarding taxpayers better, “including the required level of total loss absorbing capacity, the modelling of risk-weighted assets and imposing capital floors,” The Australian reports.
“The potential consequences of the Basel IV proposals need to be carefully considered,” ANZ said in its submission to the Murray inquiry report, which recommended regulators increase capital requirements for the banks so they are “unquestionably strong” globally.
“In the residential mortgage market, for example, the proposals may encourage authorised deposit-taking institutions to implement much greater differential pricing between customer groups than currently occurs in the Australian market, to reflect the wider spectrum of capital requirements.
“This may include higher pricing to customers with higher loan to value ratios.”