Olympic swimming legend Ian Thorpe has vowed to bounce back after his personal finances took a hit in the global financial crisis.

He reluctantly confirmed he recently suffered serious cashflow problems after shedding lucrative sponsorship deals to focus on his university studies, News Ltd newspapers say.

When broadcaster Alan Jones became aware of his friend’s situation, he rang Westpac boss Gail Kelly to seek her help to restructure Thorpe’s financial affairs, News Ltd says.

Thorpe has now streamlined his interests, declaring he wants to lead “a happy and simple life”.

“Like my sporting career, one of my strengths is my resilience to bounce back from any setback,” he said.
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The central bank says the outlook for the global financial system is less worrying than it was a year ago at the height of the global financial crisis, but there are still challenges ahead.

Regulators will have their work cut out trying to adapt supervisory frameworks to reduce the chances of a repeat of the fallout that occurred in late 2008, starting with the collapse of US investment bank Lehman Brothers.

“Realistically, the task is to reconfigure regulatory frameworks to lower the probability, and the cost, of future crises while assisting recovery from the recent one,” Reserve Bank of Australia (RBA) governor Glenn Stevens said on Tuesday.

“That is every bit as difficult a challenge as getting through the immediate crisis itself.”

One of the most difficult issues will be the supervision of so-called “too-big-to-fail” banks or institutions, corporations deemed too important to be allowed to go under when crises develop.
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Credit unions and building societies have come through the financial crisis in good shape and are looking to merge to provide economies of scale and repel competition from the major banks.

But mutual depository institutions need to be choosy about merger partners because part of their attraction is the long-term relationship they have with many members, often based on geographic identity, KPMG financial services partner Martin McGrath says.

“Consolidation is going to continue (but) not every merger is a good merger,” Mr McGrath told journalists after KPMG released annual performance survey of building societies and credit unions on Tuesday.

“A good merger is one where you can create some efficiencies but still maintain that long-term bond.
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The ACCC appears to have overestimated the strength of Australian mortgage competition when announcing last year that it would not oppose the Westpac / St George and Commonwealth Bank / Bankwest mergers.

The ACCC’s Public Competition Assessment in August 2008 calculated the merged Westpac / St George entity would at that point have had a mortgage market share of 21%. At the end of September 2009 the combined Westpac / St George entity has 23.4% mortgage market share, according to the forthcoming CoreData-brandmanagement Australian Mortgage Report.

In forming its view last year the ACCC noted a number of regional banks were expanding their presence in other states, citing Bankwest, Bank of Queensland, Suncorp and Bendigo Bank.
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A year ago, many people would probably have said a GFC was a recipe for deep-fried chicken.

Now, though, the Global Financial Crisis is part of the vernacular and understood by most, at least to some vague extent, like global warming and low-carb diets.

It was a year ago that the crisis entered its most dangerous phase, but it was by no means the start.

Cracks were beginning to appear in the edifice of high-risk lending that had been encouraged by the ultra-low interest rates employed to cushion the impact of the dot com share price crash in early 2000.

By early 2007 housing prices in the US were a year past their peak, the trickle of institutional failures was becoming a steady current and some big names were being dragged under.
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A strong banking system helped cushion Australia from the worst of the global financial crisis, the Reserve Bank (RBA) says.

RBA assistant governor (financial system) Malcolm Edey said the domestic financial system had been “more resilient” than its overseas counterparts during the crisis as its profits were robust and therefore could keep lending.

“This is not always a popular point to make, but it’s a great advantage during an economic downturn to have a banking system that remains profitable and is able to continue lending,” Dr Edey told the Financial System Developments in Australia Forum in Sydney on Wednesday.

“In 2008, the major banks in the US and Europe moved sharply into loss, though some have returned to profit this year.
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photo credit: kyle simourdThe world economy will remain in recession until the end of 2009 even though the worst of the global financial crisis has passed, the celebrated US academic known as “Dr Doom” says.

“Certainly, we’re closer to the bottom than six months ago,” Professor Nouriel Roubini told the Diggers and Dealers mining conference in Kalgoorlie, Western Australia, on Monday.

Prof Roubini is New York University Stern School of Business professor of economics and international business and earned this nickname, Dr Doom, for his dire economic forecasts.

“The worst of the global financial crisis is behind us but I don’t believe the recession is yet over at the global level, ” Prof Roubini said at the conference.
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photo credit: Tony the MisfitTreasurer Wayne Swan has echoed the comments of US President Barack Obama, saying the tough times caused by the global economic downturn are not over.

Speaking ahead of the release of the latest US economic growth figures, Mr Obama said that the “huge volatility or panic” in the banking system and financial markets had “generally settled down”.

However, the US president said the gross domestic product figures were still expected to show the nation’s economy contracted and that job losses remained a huge problem.

Mr Swan said it was clear the “tough times aren’t yet over”.
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By Jill Fraser for Lending Central

The Prime Minister Kevin Rudd and economist Dr Steve Keen are on the same page regarding their pessimistic view of Australia’s road to recovery. But that’s where the union ends.

Keen, one of only a handful of economists worldwide who predicted the global downturn refers to the Federal Government’s stimulus packages as fodder for our junkie economy and argues that ultimately it’s just postponing the inevitable.

“They’re dangerous artificial fixes,” he told Lending Central equating the government’s attempt to restart private borrowing by injecting billions of dollars into the economy to a drug overdose.

“Our “neoclassical” economic doctors are trying to bring the patient back to health by administering more of the same drug. It’s a bit like giving a junkie, who has just taken an overdose, more heroin,” he declares.
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Treasurer Wayne Swan says he welcomes a report which shows signs of economic recovery, conceding the worst of the global downturn could be over.

The Access Economics business outlook report says the jobless rate could hit a ceiling of 7.5 per cent in 2010 - lower than the government’s prediction of 8.5 per cent.

But Mr Swan says it is still important to push ahead with stimulus measures to help slowing investment in private business and trade.

“It doesn’t show that we’re out of the downturn, it shows that the worst of the global economy may be behind us but that we will live with the consequences of the global recession for some time to come,” Mr Swan told reporters in Brisbane on Tuesday.
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photo credit: giopuo

The global financial crisis has left the Anglican Church with the same problem that confronts federal Treasurer Wayne Swan.

Anglican Archbishop of Brisbane Dr Phillip Aspinall on Saturday told his flock a structural deficit in the diocese of Brisbane was putting a strain on the church.

“All is not rosy on the financial front,” Dr Aspinall told the 76th synod of the Diocese of Brisbane.

“We continue to face significant challenges.
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Australia’s banks have protected their margins at the expense of business customers rather than home-buyers, during the global financial crisis, a report published by the central bank shows.

The report also found the major banks’ average net interest margin (NIM) - a main indicator of bank profitability - had risen recently, offsetting falls that occurred in the early stages of the crisis in mid-2007.

In the decade prior, the average NIM on the banks’ Australian operations had tended to decline by around 10 basis points (0.10 percentage points) a year, the Reserve Bank of Australia (RBA) report published on Thursday said.

This was partly due to tighter spreads on some loan products.
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A more encouraging outlook for the global economy is likely to persuade the central bank to leave official interest rates unchanged after its board meeting this week.

Nineteen of the 20 economists surveyed by AAP expect the cash interest rate to remain unchanged at a 49-year low of three per cent following the central bank’s May board meeting on Tuesday.

The lone dissenting voice was the National Australia Bank (NAB), which is forecasting a 25 basis point monetary policy easing.

Westpac Banking Corporation senior economist Justin Smirk said signs of improvement in the world economy are likely to see no change, given interest rates are already at very low levels.
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The world’s beleaguered financial markets are slowly recovering from the doldrums of the economic downturn, ANZ chief executive Mike Smith says.

But it does not necessarily mean banks will pass on to borrowers further cuts in official interest rates, he warned.

Despite ANZ reporting a 28 per cent plunge in first-half profit on Wednesday due to bad debts and losses on derivative trades, Mr Smith said the worst was behind the financial sector.
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photo credit: Mirko MacariToday’s guest post comes from David Khalil, NSW State Manager from Refund Home Loans.

The financial world around us seems to be changing by the instant, which leaves you feeling that its near impossible to keep up. With hundreds of emails, adverts, papers and TV news programs delivering minute by minute updates its hard to know what information is useful to sift through in your spare time, if you have any.

You don’t know what to believe, one article is positive and another negative. So it’s worth while to take time to see through the maze of noise and unravel this mystery of hyper information download to decode this Global Financial Crisis.
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