Worried about Europe's debt trouble?
17th June 2010
With the European debt situation getting worse by the day many of us here in Australia are wondering how serious the situation is, and what it means for us. According to the Bank for International Settlements (BIS), the official banker to the world's central banks, the European debt crisis is beginning to look remarkably similar to the subprime mortgage meltdown. That financial fiasco came out of the United States in 2007 and spread like a virus through the global economy.
The head of Australia's central bank, Glenn Stevens, has warned that Europe's financial problems could spread to the global economy, if conditions continue to worsen. While we are getting used to predictions of economic doom and gloom it is worth remembering that Australia was the only developed nation in the world to avoid recession during the global financial crisis. Australia's strong trade links with Asian countries also provides us with some insulation from debt problems coming out of Europe.
In some ways Europe's debt problems are advantageous to Australians. In May 2009, one Aussie dollar bought around 56 Euro cents; in May 2010 that same Aussie dollar now buys around 69 Euro cents. Meaning your trip to Paris, Berlin or Rome is cheaper now than it was 12 months ago. For home owners too, a volatile world economy may make the Reserve Bank of Australia (RBA) think twice about raising official interest rates.
The European debt crisis however still has the possibility to get significantly worse and may cause problems for Australia. Governor Stevens recently cautioned that 'the issues will continue to need careful handling by all concerned and close monitoring by the rest of us. It cannot be denied that the potential for the further financial turmoil exists.'
National Security Awareness Week
National Security Awareness Week June 6-11 2010
The Internet is an incredibly useful tool for many businesses, and ours is no exception. In this information age the technologies that we depend on every day present us with both great opportunity and great risk. That is why every day we continue to monitor and upgrade our security systems. We strive to always be up to date with the latest online scams and ensure that you, our members are informed of any dangerous developments.
While it is our job to ensure our systems and processes are guarded against cyber criminals, it is everybody’s responsibility to be smart while using the Internet. That is why we enthusiastically support the Australian Government’s National Security Awareness Week initiative. The Week aims to help Australians understand cyber security risks and educate home and small business users on the simple steps they can take to protect their personal and financial information.
National Cyber Security Awareness Week 2010 is from 6 to 11 June and will promote six easy tips for better online security:
- Install security software and update it regularly.
- Turn on automatic updates so that all your software receives the latest fixes.
- Get a stronger password and change it at least twice a year.
- Stop and think before you click on links or attachments.
- Stop and think before you share any personal or financial information—about yourself or your friends and family.
- Know what your children are doing online. Make sure they know to stay safe and encourage them to report anything suspicious.
For more information on National Cyber Security Awareness Week visit the website at: www.staysmartonline.gov.au/news/news_articles/feature/national_cyber_security_awareness_week
RBA keeps rates the same
2nd June 2010
The Reserve Bank of Australia (RBA) announced on 1st June that it would be keeping its official interest rate level at 4.5%. This was welcome news for many borrowers who have endured three interest rate increases in the past three months, and six since October 2009.
The rate rise hold was not unexpected after Greece and its debt problems sent European and then world financial markets into turmoil. Australia’s housing sector also looks to be cooling with research showing that house prices remained flat through the month of April. This is the first time in the past year that house prices didn’t rise. The number of new building approvals has also dropped significantly over recent months, further proof of a housing sector slowdown.
The following is a statement from Glenn Stevens, Governor of the RBA, explaining in further detail the interest rate decision:
‘At its meeting today, the Board decided to leave the cash rate unchanged at 4.5 per cent.
‘Since the Board last met, concerns about sovereign creditworthiness in several European countries have been a focus of financial markets. Investors have generally displayed a good deal more caution. As a result, equity prices have fallen and long-term government bond rates have declined outside of the countries most affected by the sovereign concerns. The Australian dollar fell sharply as part of this adjustment. Commodity prices have also softened, though those important for Australia remain at very high levels.
‘European policymakers have responded by assembling a large package to provide financing for the relevant countries for a period of time, stabilise bond markets and provide liquidity. They have also committed to action to bring budget deficits down and stabilise debt over time.
‘The effects of these various factors on the world economy will need to remain under review. At this stage, global growth is still expected to be at about trend pace in 2010. Conditions in Europe overall have been relatively weak, and the foreshadowed budgetary tightening will probably mean that this will continue, but growth is becoming more established in North America. In Asia, growth has continued to be quite strong and may need to moderate in the year ahead.
‘In Australia, with the high level of the terms of trade expected to add to incomes and demand, output growth over the year ahead is likely to be about trend, even though the effects of earlier expansionary policy measures will be diminishing. Inflation appears likely to be in the upper half of the target zone over the next year.
‘Consistent with that outlook, and as a result of actions at previous meetings, interest rates to borrowers are around their average levels of the past decade, which is a significant adjustment from the very expansionary settings reached a year ago. Taking all the available information into account, the Board views this setting of monetary policy as appropriate for the near term.’
It all comes back to you
19th May 2010
We understand that we have a responsibility to our members and community to be the best we can be. As our 2010 TV commercial suggests that is why '4.5 million Australians choose to bank at a place that isn’t a bank at all. A place with the products of a major bank but where profits go back into making better products. When you bank with a credit union or building society, it all comes back to you.'
Our new mini-site has been designed as a place where members and non-members can find out about who we are and what we are all about. We hope you can take a look at the site and forward the link onto anybody you think would benefit from joining our organisation.
Respected industry analyst InfoChoice has estimated that Australians cost themselves $2.7 billion in excess mortgage payments because they stick with the big banks and don’t seek out other players. However, 90% of home loans are still provided by the big four banks because people are unaware of the benefits of credit unions and building societies.
Our mini-site and participation in the 2010 credit union and building society TV commercial are aimed at informing Australians that they have a real alternative to banks.
Questions?
If you have any questions, please contact us 
