18 June 2021

  • Central bank digital currencies (CBDCs) are already operating in the Bahamas and being trialled in China. They will be introduced by many countries over the next five years.
  • CBDCs enjoy the crucial advantage of total security, because a central bank can’t go broke. But, in order to achieve broad acceptance, CBDCs also need to be cheaper or faster or more efficient or more private or more convenient than the alternatives.
  • CBDCs differ from other cashless payment instruments such as credit transfers, direct debit, stablecoins, or cryptocurrencies, because they are “government money”, being direct liabilities of the central banks. Issuing this “extra currency” involves costs, but CBDCs also allow central banks to see real-time transactions, create audit trails, monitor criminal activities, and prevent money laundering.
  • Although an Australian CBDC is unlikely in the near future, the technology is evolving rapidly, and may have important effects on the global financial system.


We’ve all heard of digital currencies like Bitcoin, Dogecoin, and other cryptocurrencies… [read more]


28 May 2021

  • The ANZ, NAB and WBC results for the March half-year demonstrated comfortable provisioning, strong balance sheets, improving margins, and prudent funding. What was missing was organic growth.
  • The banks’ loan write-downs in the next two years will be less than the provisions they made last year, but provision write-backs are no substitute for growth.
  • We continue to believe that, although the banks will track Australia’s post-coronavirus recovery, they will underperform the market in the longer term.

Last November we said that the big four banks were on the road to recovery, and recommended that investors hang onto the banks as a leveraged play on Australian growth in 2021. Over the last six months the banks’ share prices rose by 35% or more: now the question is, can they keep on out-performing? [read more]