Increased competition for Australian retail deposits won’t cause future liquidity issues
The impact of an increasingly competitive landscape for retail deposits in Australia will felt in pricing, not liquidity – with the growing appeal of other asset classes a more significant threat to deposit levels
Increased price competition by Australian banks for bank deposits as a result of these forming a key component of Basel III's liquidity coverage ratio (LCR) will not represent a threat to liquidity levels as long as such funds don't move internationally, according to participants at the Risk: Return Australia conference.
Basel III's liquidity ratio places a high value on deposits from retail and corporate accounts which are deemed to be "sticky", and are a significant issue for Australian banks
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