Business Briefing: what super is doing to banking and finance

New research modelled how an increase in the superannuation guarantee would affect the finance sector and the results show it all balances out, writes…

Jenni Henderson, The Conversation

The total of superannuation assets in Australia is a staggering A$2 trillion and contributions to this are rising. super retirement superannuation saving elderly old

But despite this significant influence, a new study shows the effects of superannuation on banking and finance mostly balance out.

A researcher who was presenting the study, Robert Waschik from the Centre of Policy Studies in Melbourne, says the study found super funds hold more offshore assets than most households, so any increase in the guarantee for superannuation would increase demand for foreign assets leading to some depreciation in the Australian dollar.

However this could be offset by the Reserve Bank raising interest rates, he notes.


Another aspect of the study tried to see whether the common gripe of bankers that an increase in superannuation could reduce the banks’ access to capital (through bank customers) could actually happen.

The modelling found the banks could access more money through a few other measures, the study showed, including equity and bonds.

Waschik says the modelling points to potential threats to financial stability through an increase in the debt to equity and debt to income ratios of households, though these should be balanced out by a deepening of the market for corporate bonds in banking and strengthening of the current accounts balance.The Conversation

Jenni Henderson, Editor, Business and Economy, The Conversation

This article was originally published on The Conversation. Read the original article.


Subscribe & don’t miss a single episode of Michael Yardney’s podcast

Hear Michael & a select panel of guest experts discuss property investment, success & money related topics. Subscribe now, whether you're on an Apple or Android handset.

Need help listening to Michael Yardney’s podcast from your phone or tablet?

We have created easy to follow instructions for you whether you're on iPhone / iPad or an Android device.


Prefer to subscribe via email?

Join Michael Yardney's inner circle of daily subscribers and get into the head of Australia's best property investment advisor and a wide team of leading property researchers and commentators.

Guest Expert


Apart from our regular team of experts, we frequently publish commentary from guest contributors who are authorities in their field.

'Business Briefing: what super is doing to banking and finance' have no comments

Be the first to comment this post!

Would you like to share your thoughts?

Your email address will not be published.