Pundits who are now suggesting that the banks now have nothing to worry about are wrong.
My basic understanding is that banks squeeze profits from turning over loans and collecting a margin between their borrowing rate and their lending rate.
With NINJA (No Income No Job or Assets) loans now a thing of the past, fewer lenders will be knocking on bank doors and walking off with a loan. Simple, there goes the revenue.
On top of that the global interest rate risk remains high. Hedging has its limits.
Trump's disgraceful behaviour and an over (debt) fuelled US economy are market distractions but pipers will be calling for their money at higher interest rates very soon.
As I see it this leaves bank shareholders with far more risk than most ASX listed micro-specs.
