Financial Crisis

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GUEST OBSERVER
Asian currencies hit a seven year low in November, on Donald Trump’s election and the potential for his policies to spur US inflation and bond yields.
Investors who fanned out across emerging markets in recent years are now bringing their money back to America.
The steep drops, and the seeming inability of some central banks to do much about it, has led to worries of a financial crisis. Some columnistsare even drawing comparisons to the currency meltdown that preceded the 1997-1998 Asian Financial Crisis (AFC). 
The AFC’s impacts were dramatic. It led to the sudden collapse of President Suharto’s regime in Indonesia and triggered the 1998 Russian bond default. Everyday economic life was upended as the five worst hit economies saw unemployment surge, inflation balloon, and investment as a share of GDP plunge more than 10%. 
It took five years for GDP per capita to reach parity with pre-AFC levels. Austerity was imposed to pay for large financial sector bailouts, in Indonesia the net cost of rescuing the financial sector exceeded 40% of GDP.
But much has changed since 1997. China’s rise means an increasingly multipolar economic order, new regional partnerships are in place, and central bankers and policymakers are less likely to repeat some prior mistakes. Even if a crisis were to materialise, it would look quite different from that of two decades ago. 
<h2>What triggered the AFC?</h2>
The AFC began in July 1997, when Thailand gave in to speculators and devalued the Baht. Many Asian nations had long either pegged or closely tethered their currencies to the US dollar. After the baht, speculators quickly turned on the currencies of Indonesia, Malaysia, and South Korea. To fight the attacks on their exchange rates, central banks had to sell dollars (Thailand) or abruptly raise interest rates (Indonesia), but eventually caved - sometimes after depleting foreign exchange reserves - and allowed their currencies to fall. 
The exchange rate declines wreaked havoc by driving up the cost of the money private companies had borrowed from abroad. Many were already struggling, amid an economic slowdown, with large foreign exchange borrowings and poor investments in overheated sectors like property. Once currencies floated, the companies’ flight to the US Dollar put pressure on domestic banks. Financial sectors became rapidly insolvent, triggering state interventions and bailouts. 
The use of fixed or managed exchange rate regimes meant central banks assumed the risks of sudden foreign exchange movements. This perceived security further prompted capital inflows and resulted in real exchange rate appreciation and asset bubbles. Hedging, an investment tool limiting the risk of exchange rate changes damaging the price of an asset, was not widespread. 
Governance problems and “crony capitalism” exacerbated these issues. The Indonesian central bank governor, for example, was part of cabinet and had little power to resist instructions to pump liquidity into ailing banks. In the end, US$14 billion was pumped into an insolvent banking sector and state auditors later found more than 60% of the funds were misused. 
<h2>A lot has changed since the AFC</h2>
It was in the reaction to the AFC that a lot of changes were made. In return for cash infusions, these countries committed to IMF supervision and extensive programmes of economic reform and liberalisation. In addition to financial sector restructuring, the programs also included “structural reforms,” such as dismantled barriers to foreign investment and liberalised trade regimes. 
From Indonesia, the IMF demanded dismantling of the monopolies and rent-creation schemes at the heart of the regime; from South Korea, it demanded large layoffs and union-busting measures. In both cases a back and forth between leaders and the IMF played out in real time as the currencies continued to fall and financial sector insolvency accelerated.
Many of these countries have also built up huge foreign exchange reserves over the past decade. Banking supervision has also greatly improved, and countries like Indonesia have created genuinely independent banking supervisory agencies and monetary authorities. 
Regional financial integration has also deepened, with initiatives like the Chiang Mai Agreement, a framework adopted by members of ASEAN as well as China, Japan, and South Korea, for bilateral currency swaps and repurchase agreements. 
China also has expanded its role, including a web of bilateral currency swap agreements with Indonesia, Malaysia, and Thailand. These Chinese renminbi (RMB) swaps are designed to facilitate trade – the RMB is the world’s second-largest trade finance currency – but swapped RMB can be converted to USD through offshore RMB trading centres and have been used to provide emergency liquidity to countries facing currency challenges (Pakistan in 2013, Argentina in 2014).
Central banks have reacted to the dollar’s sudden strength by announcing currency interventions, discussing rate hikes, and pressuring banks to curb “speculative” trading. China has announced closer scrutiny of some outbound transactions and Malaysian authorities have asked banks to limit some investments used for offshore ringgit hedging. This has prompted fretting among financial analysts who recall that Malaysia imposed some capital controls - effectively preventing ringgit from being exchanged and transferred out of the country - during the AFC. 
<h2>Going forward</h2>
This is not to rule out a crisis (although markets may well reevaluate assumptions about Trumpnomics), as the end to years of plentiful dollars will have an impact. Debt levels are higher than pre-AFC levels, and foreign currency-denominated emerging market debts have more than doubled in the last ten years. Instead, global economic polarities are much changed because of China’s emergence, weakness in Europe, and isolationism in the US. Any crisis would play out differently than in 1997/98. 
Economic managers are far less in thrall to economic orthodoxies as they were in the 1990s to the “Washington Consensus” and are therefore likely to blaze their own trails. The IMF, which remains the global lender of last resort, has also fine tuned its approach and is far less prescriptive than after the years of heady growth during the 1990s.
Whereas Malaysia during the AFC imposed capital controls and snubbed the IMF, just across the Malacca Strait Indonesia provided free movement of capital, which allowed the mass exit of both foreign and domestic capital. Combined with efforts to provide liquidity to the banks, the absence of capital controls undermined the government’s ability to carry out monetary policy. Many countries prudently used some capital controls during the global financial crisis, and as a result, some mild to moderate capital controls are likely.
A final variable is China, which despite its own currency challenges is keen to further the end of the US’s sole leadership of the international financial order. The aforementioned currency swaps, though likely insufficient for seeing off a systemic, regional crisis, show its ambitions to position itself as emerging markets’ preferred economic partner. 
Efforts like the recent purchase of US$4 billion in assets from Malaysia’s disgraced 1MDB further shows an opportunistic approach to emerging geostrategic events. As a result, the likes of the IMF and friends, which dictated large, condition-laden bailouts in return for AFC assistance, are no longer the sole port of call for a beleaguered economy, and any post-crisis order, much shaped by these institutions after the AFC, might end up quite different.
Matthew Busch is PhD candidate at Melbourne Law School, University of Melbourne and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/matthew-busch-284580" target="_blank">here</a>.
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Don't expect a rerun of the Asian Financial Crisis

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GUEST OBSERVER
It is surely time for governments around the world, including Australia’s, to remember the first law of holes: if you’re in one, stop digging.
Governments have been digging madly since the global financial crisis, injecting massive amounts of monetary and fiscal stimulus. It hasn’t worked. 
We don’t have much to show for it in Australia - an interest bill of $16 billion on government debt compared with zero before the crisis, and a growth rate and unemployment rate that are struggling to meet long term averages. 
The International Monetary Fund (IMF) has repeatedly downgraded its global growth forecasts over the past decade and is about to releaseanother downbeat global growth forecast.
The world economy is in its 6th year of below average growth since 1990. Japan has not grown at all - its GDP in 2016 is exactly at the level it was in 2008 – despite massive amounts of monetary and fiscal stimulus over a decade. 
Growth in Europe has remained below 1% every year since 2008, well below its pre-crisis levels, despite the United States Federal Reserve relentlessly pumping new money into the banking system with interest rates already zero. And the US also remains in a funk with growth at 1.5%, less than the 2.5% long run average, having also pumped new money into its banking system and running budget deficits every year that have seen government debt steadily grow as a share of the economy.
Incredibly, the IMF and some governments have not given up. They now accept that perhaps cheap money and plenty of it hasn’t worked, but they still cling to fiscal stimulus as the last great hope as long as it’s the right kind. 
According to the IMF, debt-financed government infrastructure spending is the answer – think roads, ports, power and communication networks. They have constructed a mathematical model showing that such infrastructure spending, funded by borrowing, actually reduces the government debt to GDP ratio in a world of low interest rates. This is because it boosts GDP by more than it raises debt, and boosts overall economic wellbeing.
This will be music to the ears of those politicians who want to spend big on infrastructure. It is however a pipedream. 
The problem is not so much what the debt is used for, although that does matter, it is more the size of debt itself. Since 2008, government debt has increased in almost all advanced countries as a ratio to GDP. 
In the US total government debt has increased from 92 to 125%, in the UK from 63 to 114%, in Japan from 184 to 246%, in Australia from 34 to 65%, and even in relatively austere Germany from 68 to 82%. The combination of rising government debt and booming asset prices (stocks and housing) financed by monetary stimulus is dangerous. 
We have seen through the global financial crisis the devastating effects of a collapse in asset prices on the economy, especially on economies with debts whether held by the private or public sector. Indeed it’s this memory that is surely one of the factors currently holding back spending by households and firms.
In this environment, it would be reckless of governments to embark on major fiscal stimulus that raises their debt levels further. The IMF’s model does not take account of the risk of an asset price collapse in a world of high debt and the effect this has on private sector spending. 
It needs to be said that the IMF’s model is essentially the same type of model that it uses to forecast GDP growth of countries and which The Economist found had an appalling record of inaccuracy. The Economist team took a sample of 220 instances from 1999 to 2014 where a country went from growth in one year to recession in the next, and found that the IMF had never once predicted the looming recession in its April forecasts of the previous year.
There is at least one prescription to the world’s low growth problem that governments have not yet tried. That is to do precisely nothing – stop digging. We may even discover things about the economy’s restorative powers that we didn’t know, or had forgotten.
A related idea is to actively unwind government intervention where evidence suggests it is not working. It is easy to dismiss such prescriptions as the old-hat 1990s deregulation agenda. 
But that was a period of great prosperity in Australia and elsewhere. In any case it’s not about deregulation, but more like what David Cameron in the UK called “better regulation” which was enabled through the Deregulation Act 2015. It is worth noting that growth in the UK has been the strongest in Europe in recent years.
Back to home, the Reserve Bank of Australia should keep its power dry when it meets today and hold its official interest rate steady at 1.5 percent. And so it should for some time to come. 
The Australian government should do the same and not be seduced by the siren call from the IMF and others to spend up big on infrastructure.
Ross Guest is professor of economics and National Senior Teaching Fellow, Griffith University and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/ross-guest-13155" target="_blank">here</a>.
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Governments and central banks should stop trying to stimulate the economy

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GUEST OBSERVER
The Reserve Bank of Australia Governor Philip Lowe was not taken to giving boring speeches. This week, Federal Reserve Chair Janet Yellen went him one better with her remarks to the British Academy. 
Yellen said of the prospect of another financial crisis like that of 2008: 
"I do think we’re much safer, and I hope that it will not be in our lifetimes, and I don’t think it will be."
Her rationale was that the regulatory changes put in place since the crisis have made the system a great deal safer.
Yellen expressed her hope that these regulations would not be overturned, saying of attempts to do so:
"We’re now about a decade after the crisis and memories do tend to fade, so I hope that won’t be the case, and I hope those of us who went through it will remind the public that it’s very important to have a safer, sounder financial system and that this is central to sustainable growth."
One piece of evidence supporting Yellen’s view were the so-called “stress tests” that the Federal Reserve has performed on US banks since 2011.
Just hours before this writing, the Fed approved plans for proposed dividend payouts for all 34 firms taking part in their annual stress tests. This is the first time since the annual stress tests began that all participating firms got a passing grade from the Fed.
So what should we make of Yellen’s prediction? This doesn’t have the ring of “confidence-boosting” rhetoric. It seems as though this is her genuine view.
At this point I should make two things clear. One: I have enormous respect for Janet Yellen, and two: I was fairly surprised by her remarks. So how does one reconcile these?
We still don’t know what caused the global financial crisis
It’s important to understand that the proximate cause of the financial crisis was a kind of “bank run on the system”. In a classic bank run - like the ones of the Great Depression - depositors go from believing that other depositors think their banks are safe, and are therefore willing to leave their money there, to believing that others consider the banks unsound.
Once investors believe that other investors are going to run on the bank, they want to run too (because banks typically hold less than 10% of the cash required to pay back all depositors). In the language of game theory, there is a switch from the “good equilibrium” to the “bad equilibrium”.
In the financial crisis there wasn’t a run on traditional banks so much as on investment banks and other financial institutions. This led to credit markets drying up (such as the commercial debt and “repo” markets).
What caused this shift in beliefs is a hotly debated issue. The large increase in US house prices and imprudent lending by US mortgage originators played an important role. The use of collateralised debt obligations (CDOs) and synthetic versions of CDOs were important. Lack of regulator controls allowed these things to happen, and incentives within financial institutions facilitated and encouraged risk and bad behaviour.
Yet for quite a long time the “good equilibrium” prevailed. What caused the switch?
That is the big question, and I’m pretty confident that not even Yellen knows the answer.
It all comes down to what we believe
What Yellen does seem to be saying is that regulatory responses to the crisis have made it much less likely that bad behaviour is going to occur. That certainly seems plausible. And if there is no - or very little - bad behavior, then beliefs about what other believe may not be particularly important.
But if there is a view that some new form of moral hazard is taking place, and people lose faith in the regulatory regime, then perhaps 2008 could occur again. And soon.
As game theory - and the lessons of the classic depression-era bank runs - teach us, it all comes down to what people believe about what other people believe.
That seems like a pretty slippery object to me.
<a href="https://theconversation.com/profiles/richard-holden-118107" target="_blank">Richard Holden</a> is a Professor of Economics and PLuS Alliance Fellow at UNSW and author for The Conversation.
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How likely is another financial crisis? It comes down to what we believe

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GUEST OBSERVER
A QUICK OVERVIEW OF CHINA’S DEBT
International estimates of China’s debt levels vary widely. The Bank for International Settlements (BIS) estimated China’s debt at around 255 percent of GDP in Q1 2016. In contrast, the International Monetary Fund (IMF) recently reported a lower estimate – at around 225 percent of GDP. Both of these measures are based on China’s official Aggregate Financing data – which (as we’ve previously noted) captures only some of the country’s shadow banking sector – the major contributor to debt growth since 2012.
WIDE RANGE OF DEBT ESTIMATES 
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Our estimate of debt draws on a broader measure of shadow banking, combined with bank loans and corporate and government bonds. This produces a much larger value for debt– at almost 323 percent of GDP in Q2 2016 – a level that places China among the highest debt advanced economies – an unprecedented position for a still developing economy. Risks related to shadow banking are distributed unevenly across the financial sector – with the IMF reporting that smaller banks are far more exposed (in terms of capital buffers) than the big four state-owned banks.
The majority of the debt sits in China’s corporate sector, particularly State-Owned Enterprises (SOEs), which effectively ties the strategies of authorities in managing the debt to the broader challenges of SOE reform. Misallocation of debt to SOEs has contributed to excess production capacity in a number of sectors – particularly heavy industry – as well as expanding the debt-to-GDP ratio.
Standard &amp; Poor’s notes that China’s private sector leverage declined in 2015, while SOE leverage continued to grow. Median SOE debt levels in 2015 were six times earnings (EBITDA), meaning that a large amount of cash flow would be required to service debt, reducing the amount available for re- investment or debt reduction.
DEBT BY SECTOR 
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Earlier this year, the IMF estimated that the potential losses from the corporate loan portfolios of China’s banks could be around 6.9 percent of GDP – an estimate that the organisation described as conservative, given that it excluded potential additional risks related to shadow banking exposures.
WARNING SIGNS DON’T GUARANTEE
CRISIS
In many respects, China’s financial system is shielded in ways other countries are not – allowing credit to accumulate rapidly (near or above the BIS danger level since 2009) without yet enduring a crisis. Domestic banks are relatively well capitalised, maintaining an internationally high reserve ratio (as mandated by Chinese authorities) and have a strong deposit base.
This means that banks are less reliant on international wholesale funding – which has a tendency to be withdrawn during periods of high risk concerns – while remaining capital controls restrict the capacity of residents from migrating their wealth (albeit not completely prevent it, as capital outflows in recent years demonstrate).
That said, the stability of funding is beginning to weaken – with banks increasingly using the short term interbank market. According to IMF’s October Global Financial Stability Report, wholesale funding (primarily domestic interbank and repo markets) provided over 30% of total bank funding in 2015, up from around 18% in 2014, with smaller banks particularly reliant on these sources. The short term nature of this funding is mismatched to the longer term loans to corporates.
CHINA’S FUNDING STABILITY DECLINING 
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Despite the relatively shielded nature of the financial sector, these characteristics do not mean that China’s government can afford to ignore the debt issue (particularly as funding stability declines), but provides them with some time to appropriately address it. 
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HOW CAN CHINA ADDRESS THE GROWING 
DEBT RISK? 
In the short term, Chinese authorities should seek to control, rather than reduce the debt-to-GDP ratio – as severe cuts to credit necessary to produce the latter would likely lead to a sharp slowdown in economic growth. Standard &amp; Poor’s estimates that banks would require around RMB 11.3 trillion in recapitalisation if current credit growth rates persisted for the next five years. Controlling the debt issue will require increasing the efficiency of lending, particularly reducing the share of funding directed to SOEs. 
The IMF note a range of measures that Chinese authorities should consider – noting that a comprehensive response to the debt issue, while it is still manageable, offers the greatest chance for success. These include imposing harder budget constraints on SOEs, restructuring or liquidating highly indebted firms and managing losses across a range of parties, including the government where necessary. The IMF also recommends introducing social assistance for displaced workers and encouraging the entry of private firms across the economy. 
Plans to restructure SOEs have focussed largely on mergers and partial privatisation. Allowing firms to swap debt for equity (a policy approved by China’s State Council in early October) is one way to address the debt issue, but poorly performing, highly indebted firms are unlikely to be attractive opportunities for investors – particularly those still scarred by the 2015 share market bubble burst. Similarly there are concerns that banks could be forced to swap bad loans for equity in so-called zombie firms, achieving little in terms of restructuring. Harder decisions around the weakest SOEs – including liquidation – must be considered. This would require the development of a sound and consistent bankruptcy framework understood by all market participants. 
Greater competition is also a way to improve the efficiency of lending – particularly if banks are incentivised to lend to more innovative private sector firms. SOEs continue to enjoy preferential barriers to entry in a range of industries – including fast growing service sectors such as communications. Greater market access for private banks in the finance sector would likely contribute to reducing SOEs share of corporate debt – as profit rather than relationships would likely drive lending decisions. 
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CONCLUSION 
Warnings from the BIS and IMF have elevated concerns around China’s corporate debt levels. While the nature of China’s financial markets provides authorities with some additional time to address the issue, urgent reform to SOEs and increased competition across the economy will be necessary to avoid a medium term financial crisis. 
Gerard Burg is senior economist, Asia for NAB and can be contacted <a href="https://www.nab.com.au" target="_blank">here</a>.
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China’s authorities must manage debt to avoid a financial crisis

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GUEST OBSERVER
In the fallout of the 2008 global financial crisis, the financial media were criticised for failing to fulfil a watchdog role, for boosting the global asset boom that contributed to the crisis, and for exacerbating the crisis when it happened.
Among the strongest accusations was that financial journalists had been captured by the small coterie of elite sources they used for information, and by a newsroom culture that favoured free markets and encouraged a pro-business attitude.
The corollary of this was that perceived doomsayers and others providing alternative viewpoints and warnings were left out of the debate. While people have called out these trends, there has been little hard evidence measuring the extent of the problem.
<h2>A captured sector</h2>
As economic policies have favoured deregulation and minimal regulation of financial markets, they have encouraged a process known as financialisation, which prioritises the finance industry and related interests at the expense of all others. The general public has been actively encouraged to become players in the finance marketplace, either directly or indirectly through loans, credit cards and savings.
Yet, while this has been happening, the public’s financial knowledge has not kept pace. Nor has the mainstream financial press concerned itself with the task of increasing general financial literacy. In fact studies suggest the trend is in the opposite direction, catering even more exclusively for finance insiders.
In the US, for instance, Columbia Journalism Review blogger Dean Starkman notes the predominance of what he calls “access reporting” – providing information to investors and corporate elites – over “accountability reporting”, which investigates corporate misdeeds and developing trends.
In Australia, <a href="https://www.tandfonline.com/doi/abs/10.1080/10361146.2014.963025?journalCode=cajp20" target="_blank">a study by Melbourne University academic Andrea Carson</a> has shown that while there has been an increase in press investigations overall, there has been a decline in investigations that deal with big companies.
Is financial news addressing the public interest, or the interests of the financial elites? Are there observable trends over the years?
<h2>The evidence</h2>
To answer these questions we conducted a comparative and longitudinal study of mainstream financial journalism in three countries during three periods of economic crisis. We looked at the coverage of the New York Times in the US, the Guardian in the UK, and the Sydney Morning Herald in Australia during: the 1990 recession, the Dot Com boom of 2000 and the global financial crisis (GFC) of 2007-8.
We analysed the number of articles that provided warning and discussion about an impending downturn in the two years before each crisis, the sources that framed the discussion, and the kinds of topics and narratives that shaped the coverage pre- and post-crisis.
Our results back up concerns that financial journalism standards have been falling.
There has been a narrowing of the range of sources used to explain events, with public relations more and more predominant. There is less context and critique and little or no warning given to the public of problems that may be looming. These tendencies worsened from case study to case study.
Of the 1990 recession data set, 60% of the coverage appeared before the recession was officially called and the discussion was broad, with a lively debate about the implications of the deregulation of the finance industry. In the two years before the bursting of the Dot Com bubble, 20% of the data set discussed various features of the boom and contemplated the possibility of a potential bust. But by the time of the global financial crisis only 8% of articles in the data set appeared before August 2007, at which time coverage suddenly explodes.
Also, by the time of the Dot Com boom and GFC the range of topics that defined and framed each crisis had narrowed, dominated now by two master narratives. First, the “new economy” idea pushed the concept of the end of financial booms and busts – something that was not completely disproved until the GFC. The GFC is shaped by the narrative of a natural disaster, which spreads like a disease from the US.
The research also found a difference in approach between financial and economics journalists, with the latter providing the most warnings, more breadth and explanations of trends.
<h2>Part of a bigger crisis</h2>
The crisis in financial journalism is but one dimension of the crisis in professional journalism generally. The traditional business model for news is under threat from reduced revenues, while the 24/7 production process directly impacts the quality of reportage. Conflicts of interest between business and media further impede the capacity and desire for critique that may damage the free market. All the evidence suggests that news quality has taken a hit and it is the general public that suffers.
Without financial journalism providing the context and critique required to understand the complexities of the financial environment, we must explore new opportunities for fair and fearless scrutiny of a sector which now impacts everyone.
Sophie Knowles is unit leader in lournalism at University of the Arts London and can be contacted <a href="https://theconversation.com/profiles/sophie-knowles-180608" target="_blank" style="line-height: 1.3em;">here</a>.
Gail Phillips is emerita associate professor at Murdoch University and can be contacted <a href="https://theconversation.com/profiles/gail-phillips-181103" target="_blank">here</a>.
Johan Lidberg is senior lecturer, School of Media, Film and Journalism at Monash University and can be contacted <a href="https://theconversation.com/profiles/johan-lidberg-7473" target="_blank">here</a>.
All are authors for The Conversation.
The paper “Reporting the Global Financial Crisis: A Longitudinal Tri-nation Study of Mainstream Financial Journalism” will be published by Journalism Studies in August 2015.
 
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Increasingly, we can’t trust journalists to decipher finance

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Nearly three in four respondents to a new banking survey believe a major bank would not give them the best service should they be in a financial crisis.
The survey for State Custodians Home Loans, conducted by Galaxy Research, asked people who they considered would provide the best service when re-negotiating a home mortgage or investment loan should they hit hard financial times.
Some 72 percent of those polled believe in these circumstances a big bank is not their best option for service.
Joanna Pretty, State Custodians general manager said 37 percent of survey respondents believe they’d receive the best level of specialised attention from a smaller lending institution such as a credit union or building society, 28 percent nominate a big bank, 25 percent say a mortgage broker, 22 percent nominate an accountant, lawyer or financial planner, and 10 percent say a non-bank lender.
“Smaller institutions tend to specialise with different products and services, and are very good at helping people who fall outside traditional parameters,” she said.
“They can also have more of an open mind as to what kind of deal they’d be prepared to do with a customer, as they’re used to evaluating extenuating circumstances.
"If you are faced with a big personal crisis and need to source a new housing loan or re-negotiate an existing one, there are practical steps you can take which will make life much easier.
Firstly, understanding your financial situation is key. You need to totally be across all your essential and non-essential expenses. Secondly, don’t rely solely on well-meaning family or friends to advise you as they’ll always colour their advice with their own personal experiences. Finally, contact various experts – not just one – and explain your situation.
"The more you talk to people, the more likely it will become clear as to who is most able to assist you.”
The survey found 43 percent of youngest adults aged 18 – 24 say they’d turn to a financial planner, accountant, or lawyer first compared to just 15 per cent of those aged 50 plus. Of those aged 25 – 34, a majority 34 percent would seek out a smaller lending institution and for Generation X-ers in the 35 – 49 age bracket, 34 percent would head to a mortgage broker and 35 per cent to a smaller lending institution. Of those aged over 50 years, a majority 46 percent would consult a smaller lending institution first.
 
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