Australia Banks Hit With Tougher Capital Requirements

The video discusses new banking regulations requiring a 10.5% tier one capital ratio, a 150 basis point increase. This change aims to ensure banks are 'unquestionably strong' following a financial system review. The Big Four banks currently average 9.85%, with Commonwealth Bank at 9.9%. Home loans, making up 60% of bank lending in Australia, significantly influence these regulations due to lending risk concerns. Banks like Westpac and ANZ are confident in meeting the new benchmarks, with ANZ aiming to achieve this ahead of the 2020 schedule.

What concerns did the regulator have regarding the current setup of lending risks?

What was Westpac's response to the new benchmark regulations?