Thank you for joining us today.

We'll be back tomorrow with more business and markets coverage, and to cover the September quarter GDP figures when they're released at 11:30am AEDT.

Until then, take care of yourselves.

Metcash was the top performing stock today, jumping 7.52% to $3.43. It was followed by Star Entertainment, which jumped by almost as much (+7.14% to 22.5 cents), and Block Inc (+5.82% to $143.94 a share).

Collins Foods was the worst performing stock today, shedding 4.29% to $8.25 a share. It was followed by Web Travel (-4.17% to $4.83) and Siteminder (-3.19% to $6.37).

Trading has closed on the ASX.

The ASX200 index gained 47.30 points today (+0.56%), to close on 8,495 points - an all-time closing high.

It broke through the 8,500 point barrier for the first time in history today, and at one point it was sitting above 8,514 points.

The Council of Financial Regulators has released an issues paper this afternoon.

It's seeking "stakeholder views" in relation to small and medium banks in Australia. 

It says stakeholders who wish to provide feedback should make a submission to the CFR by email by 7 February 2025.

I've attached the issues paper below.

It contains an interesting snapshot on the state of Australia's banking system:

• Australia’s 131 banks differ in size by several orders of magnitude. 
• Collectively, the 4 major banks account for around 72% of banking system assets, down from their recent peak of 77% in 2015.
• There are 5 medium banks in Australia with a joint market share of 12%; this group includes most banks commonly referred to as mid-tier or regional banks. The medium banks’ market share had expanded around 3 percentage points in the 5 years preceding Australia and New Zealand Banking Group’s (ANZ’s) acquisition of Suncorp Bank (a medium bank) in July 2024. 
• The 74 smallest banks make up 6% of the banking system and are mostly mutual institutions; the number of mutual institutions has fallen from over 200 in the year 2000 as credit unions and building societies (CUBS) have consolidated. 
• Foreign branches – of which there are 48 – make up around 9% of the banking system and mostly serve wholesale customers.

The Australian banking system has more than $5 trillion in resident assets (around 200% of GDP). It is similar in size, relative to GDP, to the banking systems in Canada and the euro area.

But the graphs below tell the story of how the number of banks in Australia has fallen significantly in the past 20 years.

The consolidation occurred largely through mergers and acquisitions within the sector, motivated in part by the potential for increased profitability and benefits from increased scale and scope:

CUBS refers to credit unions and building societies.

If you're actively looking to buy your first home, but having trouble finding something you can afford, I'd like to speak with you.

I'm especially keen to find out what effects delays in attaining home ownership is having on your life plans, such as starting a family or a business, where to live, or what job you do.

This would be part of a podcast project I'm working on for next year.

The best way to get in touch would be to fill in the contact box below and in the "why are you contacting us section" select news tip or story contribution and then that you are a prospective first home buyer interested in the housing podcast project.

I know the link below appears as "just a moment" in the blog, but it really does take you to our business team contact form if you click on it.

The Council of Financial Regulators held its regular quarterly meeting yesterday (2 December).

The Council is the main coordinating body for Australia’s financial regulators, bringing together the Australian Prudential Regulation Authority (APRA), the Australian Securities and Investments Commission (ASIC), the Australian Treasury and the Reserve Bank of Australia (RBA).

The Reserve Bank has released the Council's quarterly statement on its website this afternoon.

Here are two themes it discussed at yesterday's meeting:

Systemic risks and vulnerabilities

The Council discussed a range of current and emerging risks and vulnerabilities that could lead to, or amplify, financial instability in Australia. 

The discussion also covered longer-run structural trends for the Australian financial system relating to digitalisation, the environment, and the evolving international security landscape.

In this context, the Council noted that there would be a range of systemic risks and vulnerabilities in focus for the year ahead, including in particular:

• Geopolitical risks. Heightened geopolitical tensions are already leading to economic and financial fragmentation, and a further deterioration in the international security environment remained a risk for the global economy and financial system;
• Operational vulnerabilities.These included the challenges associated with cyber threats and managing dependencies on third-party service providers. The increasing digitalisation of financial services and the nature of operational connections across the financial system were likely to make these vulnerabilities more challenging to manage over time;
• Liquidity risk.The Council noted the potential for liquidity shocks to be amplified through the financial system. The potential for rapid deposit runs had been highlighted by international events in 2023. It was also noted that there are increasing interconnections between the banking and superannuation sectors, which can increase contagion risk;
• High household leverage. Consistent with their long-standing focus on household debt in Australia, CFR agencies continue to closely monitor and assess developments in this area;
• Climate change. Understanding, measuring and preparing for the effects of both the physical and transition risks of climate change is a key priority for the financial system, in line with the Government’s sustainable finance strategy.

Geopolitical risk

The Council noted that geopolitical risk is increasingly cited as a principal concern for regulators and industry internationally, and is likely to fundamentally characterise global affairs for some time. 

Heightened international tensions create the potential for adverse effects on the economy and financial system, including from cyber threats and conflicts.

In this context, the Council agreed to a work program that would support member agencies and industry to strengthen the resilience of the financial system. 

The Council also noted that there are a number of related initiatives already in train to reinforce financial system resilience, including the implementation of APRA’s operational risk standard and new crisis management powers for financial market infrastructures (FMIs).

A thought from Allan P.

ASX 200: +0.56% to 8,495 points (close)

Australian dollar: +0.03% at 64.73 US cents 

S&P 500: +0.2% to 6,041 points

Nasdaq: +1% to 19,407 points 

FTSE 100: +0.3% to 8,312 points 

EuroStoxx 50: +0.9% to 4,846 points 

Spot gold: +0.19% to $US2,644/ounce 

Brent crude: +0.24% at $US72/barrel 

Iron ore: -0.11% to $US105.3/tonne 

Bitcoin: +0.83% to $US96,194

Prices current around 5:10pm AEDT

Live updates on the major ASX indices: 

CBA economist Belinda Allen says when the September quarter GDP figures are released tomorrow we'll see that the public sector "will again be the dominant driver of economic growth."

She has circulated a note looking at this morning's ABS data on government finance in the September quarter, which showed how the total volume of public demand was 2.4% higher in the September quarter, and 4.2% larger than a year ago.

But Ms Allen says public investment stood out in the figures, in terms of strength, rising by 6.3% in the quarter. 

And she says Commonwealth defence investment was the main driver of the growth, up a massive 35%.

"Even excluding defence spending though, national investment was still 6.9% higher in the quarter," she said.

"State and local government investment spend increased by 1.1%."

"Total public investment will contribute 0.36 percentage points to growth in the quarter," she said.

You can see those figures below:

The Australian Banking Association has welcomed a federal government move to force telcos to check whether text messages claiming to be from certain organisations have actually come from their registered numbers.

"Impersonating banks, government agencies and popular brands in text messages is a common method used by scammers to deceive customers," noted the ABA's CEO Anna Bligh.

"This register will be crucial to stopping SMS impersonation scams in their tracks before they can cause harm to Australians.

"By requiring telcos to block known scam SMS numbers, Australia will have a new weapon to disrupt a popular business model that scammers use."