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THE NEWS WRAP: Government puts FoFA changes on ice
Finance Minister Mathias Cormann has announced the government won’t introduce proposed changes to the Future of Financial Advice regulations into parliament this week, following Arthur Sinodinos’ resignation as assistant treasurer.
“I have decided to pause the process on the Future of Financial Advice regulation for the time being to enable me to consult in good faith with all relevant stakeholders before pressing the go button on our changes,” Cormann told Fairfax.
“We remain committed to implement the improvements to FoFA, which we took to the last election, as soon as possible.”
Chinese factory output slows
Chinese factory output has slowed for a fifth consecutive month, according to the Markit/HSBC Purchasing Managers' Index (PMI), suggesting a further slowdown in China’s economy.
The PMI had a reading of 48.1 in March, down from 48.5 in February, with a result under 50 showing the pace of growth in manufacturing is slowing.
“Weakness is broadly based with domestic demand softening further,” HSBC chief economist for China Qu Hongbin says.
“We expect Beijing to launch a series of policy measures to stabilise growth.
“Likely options include lowering entry barriers for private investment, targeted spending on subways, air cleaning and public housing and guiding lending rates lower.”
Deregulation set to create Chinese bank boom
The Chinese financial system could be twice the size of the US’s by 2030 if deregulation continues, a new ANZ report shows, as China announced plans to allow the first privately owned banks since the Communist revolution.
“[Chinese] banks will focus more on consumer finance, funding small-medium enterprises, this sort of thing,” ANZ chief economist Warren Hogan says.
“And of course the industry at the moment has got a huge array of banks – there is the five big banks in China but there's hundreds of smaller banks.
“And, as we saw in Australia in the 80s, and there were many examples of it, there will have to be significant consolidation of that sector over the decade ahead.”
The Dow Jones Industrial Average is down to 16276.7. The Aussie dollar is up to US91.35 cents.