Financial Services Talking Points | 21/08/18

In today’s talking points China tries reverse mortgages, AI creates new physics for finance, China said to start fresh round of checks on P2P lenders and Asian shares mixed on doubt of resolving US-China trade spat



Channeling Tom Selleck, China Tries Reverse Mortgages
With one of the world’s greatest ageing populations, the Chinese government is forced to come up with creative solutions to combat the threatening pensioner crisis.
The real-estate market in China is an untapped source of wealth.  The total estimated urban household debt being 44 trillion yuan, while the estimated paper value of these residences equating to 360 trillion yuan.
The idea of reverse mortgages has been raised by the China Banking and Insurance Regulatory Commission.  For many Chinese, pensions are nominal and other family member bear the burden of caring for their parents and grandparents.  The idea of reverse mortgages is to enable the elderly to draw down home equity in order to supplement their income and live more comfortably.

Source: Bloomberg
AI creates new physics for finance

Artificial intelligence is set to revolutionise the global financial services industry, but Australian banks and regulators are extremely under-prepared, according to a report released by the World Economic Forum last week. The report will serve as a wake-up call to Australian institutions who have been thinking about the impact of AI is more advanced offshore than it is here. According to the report, AI is “weakening the bonds that have historically held together financial institutions, while creating new centers of gravity where new and old capabilities are being combined in unexpected ways”, and that AI shouldn’t be viewed in isolation but in conjunction with other emerging technologies such as blockchain, quantum computing and cloud technology.

Source: Financial Review


China said to start fresh round of checks on P2P lenders

China has started a new round of checks on thousands of peer-to-peer (P2P) lending sites, according to a document obtained by Bloomberg News, as authorities continue their efforts to clean up the industry.
China’s restrictions on financial risk has weighed on P2P platforms since 2016, intensifying in recent months after the country’s credit markets tightened and the banking regulator issued an unusual warning to savers that they should be prepared to lose all their money in high-yield products.

These checks, which include self-review by P2P firms as well as inspections by local financial regulators, must be completed by the end of the year.

Source: Business Times


Asian Shares Mixed On Doubt Of Resolving US-China Trade Spat
Amid doubts on the resolution of the US-China Trade War, share results were mixed today. Japan’s Nikkei dropped 0.2%, Australia’s ASX dropped 0.9%, Hong Kong’s Hang Seng remains stable, South Korea’s Kospi increased 0.4%, Shanghai Composite added 0.6%, Taiwan was up, and Singapore down. America’s S&P increased 0.2% and the Dow Jones increased 0.3%.

Source: ABC News