Just a few months after acquiring a prime Broadbeach site on the corner of First Avenue and Surf Parade, family-run developer <a href="https://www.apartments.com.au/developers/raptis">Raptis</a> has filed fresh plans for a new apartment development.

Raptis is seeking to deliver a <a href="https://www.apartments.com.au/new-apartments/17-19-first-avenue-broadbeach-qld-4217">29-storey tower with 73 apartments</a> on the 818 sqm site. It will be the developer's seventh project in the suburb, as they are approaching completion of The Sterling on George Avenue.

There will be a pool, barbecue and outdoor dining area, residents lounge and dining, sauna and steam room, gym, and a Yoga and Pilates studio.

<img alt="Raptis" data-entity-type="file" data-entity-uuid="b554da3f-7344-49aa-b1c9-44cf459af0d7" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-06-05%20at%2010.41.45%E2%80%AFAM.png?VersionId=zzjWu1iO1wnuYv4EV4fyOyf5nSXjGYut" />

Raptis Joint Managing Director, Evan Raptis, says they remain&nbsp;committed to developing quality infill sites across the Gold Coast in the lead-up to the 2032 Brisbane Olympics.

"This project continues our long track record of delivery in Broadbeach, and we look forward to bringing another premium development to this thriving precinct."

The announcement follows strong delivery momentum for Raptis, with The Sterling Broadbeach nearing completion and construction well underway on the final stage of the Waterpoint community adjacent to Harbour Town. The developer's continued investment in the Gold Coast reflects confidence in the region's apartment market fundamentals, underpinned by sustained Southeast Queensland population growth.&nbsp;

The outlook for the region is further bolstered by infrastructure investment tied to the Brisbane 2032 Olympic Games, which is expected to drive continued economic and population growth across the SEQ corridor.&nbsp;

Subject to a favourable response from Gold Coast City Council, construction on the new First Avenue tower is targeted to commence before the end of 2026.&nbsp;

Read more:&nbsp;<a href="https://www.apartments.com.au/news/qld/it-s-all-in-the-family-four-decades-later-raptis-continues-to-shape-the-gold-coast-skyline">It’s all in the family: Four decades later, Raptis continues to shape the Gold Coast skyline</a>

Read more: <a href="https://www.apartments.com.au/news/qld/raptis-secures-prime-surf-parade-site-for-next-broadbeach-apartment-development">Raptis secures prime Surf Parade site for next Broadbeach apartment development</a> 
&nbsp;

Gold Coast developer brings seventh Broadbeach project to market, targeting construction commencement before year end

Joel Robinson

First look: Raptis lodges plans for new 29-storey Broadbeach tower 

Brisbane development veteran Kevin Seymour's Seymour Group is set to deepen its presence on one of Brisbane's most tightly held riverfront addresses, lodging revised plans for a luxury apartment development on Oxlade, just a few doors down from The Oxlade, which it completed in 2024.

The <a href="https://www.apartments.com.au/new-apartments/70-72-oxlade-drive-new-farm-qld-4005">new project at 70-72 Oxlade Drive</a>, directly north of The Oxlade, will have 27 apartments across a seven-storey building&nbsp;overlooking the Brisbane River and Merthyr Park. It's a revision from a 2021-approved design.

Designed by bureau^proberts, the project has evolved from the previously approved 26-apartment scheme, introducing an additional penthouse level while maintaining a low-density, boutique character. The development will comprise 26 three-bedroom apartments and a single four-bedroom penthouse, supported by two basement levels with 86 car spaces and 34 bicycle spaces.

The architectural response is centred around two distinct building forms separated by a landscaped open-air atrium.&nbsp;"This dual composition captures and embraces Brisbane’s subtropical environment whilst breaking down built form and scale," the submission to the Brisbane City Council noted.

<img alt="First look: Seymour Group returns to Oxlade Drive with revised riverfront apartment plans in New Farm" data-entity-type="file" data-entity-uuid="c12d84d0-bc11-4067-b46f-5bd2d786a34d" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/new%20farm%20landscape.png?VersionId=YEPc2k5CAdh6aAPlu4uVpgZadh4MEfRd" />

A defining feature of the design is a deep landscaped void running through the centre of the building, creating what bureau^proberts describes as a "natural ravine" that enhances airflow, daylight penetration and resident amenity. The design report notes that the separation of the two building volumes is intended to maximise natural light, cross-ventilation and outlook while strengthening connections to the surrounding riverfront setting.

Curved balcony edges, integrated planting and extensive landscaping throughout the façade reinforce the subtropical design approach. The building's façade is softened by elevated gardens and planter beds, creating a green edge that complements the established landscape character of Oxlade Drive and neighbouring Merthyr Park.

New Farm has become one of Brisbane's most sought-after suburbs for developers delivering premium downsizer-focused apartments.

GRAYA has been particularly active in the precinct, completing both Chalk and York in recent years, while construction of Moray House, being delivered for Spyre, is now nearing completion. Architect-turned-developer Joe Adsett recently launched <a href="https://www.apartments.com.au/new-apartments/arcilla-new-farm-by-joe-adsett-28-maxwell-street-new-farm-qld-4005">Arcilla on Maxwell Street</a>, an exclusive collection of just nine apartments.

First look: Seymour Group returns to New Farm's Oxlade Drive with riverfront apartment plans

A new residential tower will be the first piece of a broader mixed-use precinct set to reshape a prominent Newcastle West site, with local developer <a href="https://www.apartments.com.au/developers/gwh">GWH</a> bringing its <a href="https://www.apartments.com.au/new-apartments/cambridge-quarter-newcastle-west-12-denison-street-newcastle-west-nsw-2302">Cambridge Quarter</a> vision to market.

The first release, Tempo, will introduce 87 apartments across a 24-storey tower, marking Stage 1 of the residential component of a larger urban regeneration project planned for the western end of Newcastle's city centre, encompassing the former Cambridge Hotel site.

Positioned on Denison Street, Tempo has been designed as the inaugural building within Cambridge Quarter, a precinct that will ultimately combine apartments, retail activation and revitalised public spaces including the revamping of the Cambridge Hotel.

[smartcode_project:default project_id=135876 project_image_fid=368853]

The tower will comprise a mix of one, two and three-bedroom apartments, including layouts with multipurpose rooms, catering to a broad cross-section of owner-occupiers. Apartment sizes range from around 60 sqm to 192 sqm, with a number of residences oriented to capture views across Newcastle Harbour, the city skyline and coastline.

GWH has emphasised liveability in the design, with open-plan layouts extending to generous balconies and terraces. Residents will have a choice of two interior palettes, while specifications include engineered stone benchtops, SMEG appliances, full-height bathroom tiling and secure building access. Premium upgrade packages will also be available.

Multiple rooftop resident retreats will provide communal outdoor space overlooking the harbour and city, offering an elevated amenity layer above the activity of the precinct below.

[smartcode_project:default project_id=135876 project_image_fid=368851]

The broader Cambridge Quarter vision extends beyond the residential tower itself. Ground-level retail activation and landscaped public areas are planned throughout the precinct, creating a walkable neighbourhood environment connected to the surrounding renewal of Newcastle West. The Cambridge Hotel is also earmarked for future redevelopment into a family-friendly hospitality venue integrated with the new precinct.

The project is strategically positioned within walking distance of Newcastle Interchange, providing access to light rail, regional rail services and direct connections to Sydney. Residents will also be close to Honeysuckle, Newcastle Harbour and the city's beaches and coastal walkways.

[smartcode_project:default project_id=135876 project_image_fid=368852]

For GWH, Cambridge Quarter represents one of its most significant Newcastle developments to date. The locally based developer, which has operated in the Hunter region since 1995, describes the project as a new chapter in the ongoing transformation of Newcastle West.

GWH Executive Director Jonathan Craig said the project had been shaped by a focus on creating lasting community connections.

"We take pride in creating places that last. Spaces where people feel connected, comfortable and a genuine sense of belonging," Craig said.

"Cambridge Quarter is something we are truly proud of, a place shaped by local knowledge, built with care and designed to be part of Newcastle's next chapter."

[smartcode_project_cta:default project_id=135876]

GWH unveils first release at landmark Cambridge Quarter precinct in Newcastle West

<a href="https://www.apartments.com.au/developers/ss-projects">S&amp;S Projects</a>,&nbsp;Rainbow Bay's busiest developer,&nbsp;has officially lodged plans for the largest development in its booming local portfolio, seeking approval for a further 88 apartments on Boundary Street.

The proposal&nbsp;at <a href="https://www.apartments.com.au/new-apartments/209-213-boundary-street-coolangatta-qld-4225">209–213 Boundary Street, Coolangatta</a>,&nbsp;marks the next chapter in the developer's transformation of the southern Gold Coast beachside precinct. It will be its fifth in the area, having already delivered Flow, Awaken and Esprit, while construction continues on the 38-apartment Radia. The new project would rise 57 metres above a consolidated 1,518 sqm site, on the same street as Radia and Esprit.

&nbsp;

Designed by <a href="https://www.apartments.com.au/architects/cottee-parker-architects">Cottee Parker</a>, the proposed development comprises 88 two and three-bedroom apartments across a contemporary podium-and-tower form that integrates extensive landscaping from street level through to the rooftop.

The tower would be delivered above a basement and multi-level podium accommodating resident and visitor parking, with the residential component commencing from level three. The design incorporates cascading planting throughout the façade, landscaped podium edges, and deep planting zones along the Boundary Street frontage.

<img alt="First look: S&amp;S Projects lodges plans for 88-apartment wellness tower at Coolangatta's Boundary Street" data-entity-type="file" data-entity-uuid="677e6615-b5c0-4b6c-b4f9-efb14fcde1a6" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/ss%20da%20pers.png?VersionId=YOnPKQm7IFXv0M5H326djEpxk80500Hi" />

A key feature of the development is its expansive rooftop wellness and recreation precinct. Plans reveal a resort-style pool deck, gymnasium, sauna, steam room, hot and cold plunge pools, rooftop terraces, barbecue areas and landscaped relaxation spaces positioned to capture views across the southern Gold Coast coastline.

The rooftop wellness focus builds on the vision S&amp;S Projects first outlined when it acquired the site for $20.25 million last year.

"We are taking every advantage to create a truly unique rooftop wellness experience with a natural feel for residents, offering stone features throughout and an underlying theme that emulates a botanical garden," S&amp;S Projects founder and director Paul Gedoun said at the time.

The proposal seeks a 57-metre building height, representing a 50 per cent uplift on the site's mapped 38-metre height limit. Planning documents argue the additional height is consistent with recently approved and emerging towers in the immediate Boundary Street and Rainbow Bay precinct.

Urbis, acting as planning consultant, said the development would provide "88 dwellings, comprising a mix of two and three-bedroom apartments, contributing to housing choice and supply within an established medium to high-rise coastal urban neighbourhood."

The scheme has undergone extensive pre-lodgement consultation with the City of Gold Coast, with the design refined following feedback relating to architectural expression, landscaping, traffic access and podium treatment.

<img alt="S&amp;S" data-entity-type="file" data-entity-uuid="0a2d70fd-62ac-4b83-97c6-b798fc1243dd" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-06-05%20at%209.16.31%E2%80%AFAM.png?VersionId=yHmghUwKM3IVGpBktQU1mE.0Lpf3WimG" />

The architectural team is led by Brisbane-based Cottee Parker, one of Australia's most active residential design studios, with landscape architecture by Dunn + Moran. The consultant team also includes ADG Engineers, Windtech and Acoustic Works.

S&amp;S Projects has become one of the most influential private developers operating on the southern Gold Coast. Since entering Rainbow Bay in 2022, the company has assembled a portfolio exceeding $1 billion in end value, establishing itself as a key player in the area's evolution into a premium apartment destination. Pezet Matheson will again handle the sales for S&amp;S.

Coolangatta is entering another wave of apartment development, following the delivery of several prominent residential projects in recent years.

John Kearney's Immerse Projects will launch&nbsp;<a href="https://www.apartments.com.au/new-apartments/kaiya-kirra-beach-5-haig-street-coolangatta-qld-4225">Kaiya on Haig Street</a>&nbsp;soon, meanwhile, Palm Beach-based Sherpa Property Group is preparing to bring its debut Coolangatta development, <a href="https://www.apartments.com.au/new-apartments/flourish-viver-87-griffith-street-coolangatta-qld-4225">Flourish Viveré</a>, to market later this year, subject to approvals.

First look: S&S Projects proposes 88-apartment wellness tower at Coolangatta's Boundary Street

A landmark former orphanage site in Surrey Hills could be transformed into a new residential community under plans lodged by <a href="https://www.apartments.com.au/developers/antipodean-land-developments">Antipodean Land Developments</a> that would deliver 76 apartments and townhouses while restoring some of the suburb's most significant heritage buildings.

The burgeoninng Melbourne-based developer has submitted plans for the 9,158 sqm site at 1 Kent Road and 24 Durham Road, home to the former St Joseph's Home for Destitute Children, a historic institutional complex dating back to the late 19th century. The proposal seeks to adaptively reuse several heritage buildings while introducing two new four-storey residential buildings set within extensive landscaped grounds.

Designed by <a href="https://www.apartments.com.au/architects/woods-bagot">Woods Bagot</a> and Kerstin Thompson Architects, the project has been conceived as a contemporary residential village embedded within a restored heritage precinct. The development team describes the design approach as "The Village in the Garden," with new buildings positioned among mature landscaping by OCULUS and significant heritage structures.

<img alt="First look: Antipodean Land Developments plans heritage-led apartment community in Surrey Hills" data-entity-type="file" data-entity-uuid="44ec8c1b-c0b6-44ae-859e-5811b3e6a023" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Untitled%20design%20%281%29.png?VersionId=p.p1_KFh4iQoV4nisdnPfQBAsWNi7m79" />

The proposal would deliver 76 dwellings comprising a mix of apartments and duplex-style residences, significantly increasing housing supply on one of the largest privately held residential landholdings in Surrey Hills. The development includes 127 car spaces, 24 bicycle spaces and more than 1,000 sqm of communal amenity, with the existing chapel building earmarked for conversion into resident facilities.

According to the planning submission, the project centres on the restoration and adaptive reuse of the site's most significant heritage assets, including the original c.1889 St Joseph's building, the chapel designed by architect Augustus Andrew Fritsch, and the historic brick perimeter walls and entry gates. The proposal also incorporates the retention of other contributory buildings including the former infirmary and school building.

Tract Consultants, in the planning report accompanying the application, said the scheme had been shaped through extensive heritage analysis and design development.

"The shared vision for the Site by the project team has culminated in a scheme which successfully breathes life back into a historic site while delivering upon the objectives of Victoria's Housing Statement in a carefully curated and contextually responsive manner."

<img alt="First look: Antipodean Land Developments plans heritage-led apartment community in Surrey Hills" data-entity-type="file" data-entity-uuid="7263b7d8-95ea-400f-9531-6ca7d22c3c33" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Untitled%20design%20%282%29.png?VersionId=4cR1tiWOsDpgxEOwZi5vVFcyvvOsYkIE" />

The proposal is being assessed under Victoria's Significant Residential Development with Affordable Housing pathway. As part of the application, three per cent of the project's residential development cost would be contributed to the Social Housing Growth Fund. The development would also provide a diverse mix of one, two and three-bedroom residences targeting a broader range of buyers than typically found in Surrey Hills' detached housing market.

Sustainability initiatives include an anticipated 66 per cent BESS score, natural cross-ventilation to 80 per cent of apartments, 28 per cent deep soil landscaping and a canopy cover outcome exceeding local planning requirements. The proposal also sets aside more than 1,083 sqm for communal indoor and outdoor resident amenity spaces.

<img alt="First look: Antipodean Land Developments plans heritage-led apartment community in Surrey Hills" data-entity-type="file" data-entity-uuid="33fad46f-fe26-4d0a-acfd-6b776e1c6a3d" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Untitled%20design.png?VersionId=D9F6WVSyYCtGvSUmith35LRp6R7PQkw_" />

Planning documents describe the property as one of the largest underutilised residential sites in Surrey Hills, arguing it presents a rare opportunity to introduce "missing middle" housing in an established inner-eastern suburb while preserving and revitalising a significant heritage precinct.

Antipodean Land Developments has built a reputation for design-focused residential projects across Melbourne, particularly in the medium-density sector. Previous developments include Neighbourhood in Brunswick East, delivered with Breathe Architecture, and Balfe Park Lane, designed by Kerstin Thompson Architects.

They've been very active in site acquisition as they build out their future development pipeline. They recently launched Thornubury House, 45 apartments above a mix of commercial, retail, and food and beverage tenancies, and have plans for a boutique project in Fitzroy and another <a href="https://www.apartments.com.au/news/vic/antipodean-plan-apartments-for-deepdenes-missing-middle-on-whitehorse-road">"missing middle" project</a> on Deepdene's Whitehorse Road.

First look: Antipodean Land Developments plans heritage-led apartment community in Surrey Hills

Financial Market

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The extreme volatility and losses seen in stock markets in recent weeks has seen calls for <a href="https://www.barrons.com/articles/should-financial-markets-be-closed-over-the-coronavirus-51584735453" target="_blank" style="font-family: Tahoma, Helvetica, Arial, sans-serif; font-size: 12.15999984741211px;">financial markets to be closed</a> and <a href="https://www.investopedia.com/terms/s/shortselling.asp" target="_blank" style="font-family: Tahoma, Helvetica, Arial, sans-serif; font-size: 12.15999984741211px;">short selling</a> restricted.
But shutting them down would be a mistake.
Amid the volatility, financial market prices convey much needed information.
S&amp;P/ASX 200 share index over the past year
<a href="https://images.theconversation.com/files/322223/original/file-20200323-22627-1bx5112.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/322223/original/file-20200323-22627-1bx5112.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a>
<a class="source" href="https://au.finance.yahoo.com/quote/%5EAXJO/" target="_blank">Source: Yahoo Finance</a>
In an early morning meeting at the White House the day after the 1987 stock market crash, then US Treasury Secretary Jim Baker floated the idea of closing the stock market.
The Chair of President Reagan’s Council of Economic Advisers, the Chicago-trained monetarist <a href="https://www.chicagotribune.com/news/ct-xpm-2009-08-28-0908270729-story" target="_blank">Beryl Sprinkel</a>, was having none of it.
According to several second and <a href="https://streetwiseprofessor.com/when-monkeys-fly/" target="_blank">third-hand accounts</a>, when his opinion was sought, Sprinkel said “we will close the markets when monkeys come flying out of my ass.”
When Reagan asked Fed Chair Alan Greenspan for his opinion, Greenspan declared, “I go with the monkeys”.
The US stock market stayed open that day and rallied late in the afternoon, injecting a note of much-needed confidence.
<h2>Prices tell us truths</h2>
The Fed’s operations to maintain liquidity (the ability to buy and sell) remain a textbook case of how to respond to severe financial market stress.
The US economy was spared recession on that occasion.
Today’s situation is different in important respects. Policymakers are choosing to shut down the economy, and financial markets are pricing shares accordingly. Bond markets have been shaken as investors sell bonds to raise cash and prepare for governments to issue a flood of new bonds.
The US dollar has rallied as the world scrambles for US dollars, sending exchange rates against the US dollar dramatically lower.
As my previous <a href="https://www.ussc.edu.au/analysis/the-reserve-currency-myth-the-us-dollars-current-and-future-role-in-the-world-economy/" target="_blank">research</a> shows, the US dollar often climbs when the economic outlook is most dire, explaining why the Australian dollar is at its lowest in nearly two decades.
US cents per Australian dollar
<a href="https://images.theconversation.com/files/322225/original/file-20200323-22590-10kj7be.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/322225/original/file-20200323-22590-10kj7be.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a>
<a class="source" href="https://www.rba.gov.au/statistics/tables/#exchange-rates" target="_blank">Source: Reserve Bank of Australia</a>
Amid such extreme volatility, it would be tempting to close financial markets, in particular, stock exchanges.
There is no reason to close markets for reasons of public health. Financial markets are now traded almost entirely electronically. The US has been forced to close its trading floors in <a href="https://qz.com/1822981/new-york-stock-exchange-shuts-floor-as-coronavirus-spreads/" target="_blank">New York</a> and <a href="https://www.cnbc.com/2020/03/11/cme-group-will-close-chicago-trading-floor-as-a-precaution-over-coronavirus" target="_blank">Chicago</a>, but these trading floors were already legacies of an earlier era, largely ornamental adornments to digital trading.
Stock markets have their own circuit breakers that kick in during extreme volatility, but to do more than that would be to deprive traders and policymakers of the insights they offer.
Price movements function as alerts. It is noteworthy that financial markets sold off days before the World Health Organisation finally declared a pandemic.
They can also inform policymakers about what to do. When share markets begin a sustained recovery, it will be a sign the worst of the pandemic might be behind us.
We need prices for financial products in the same way we need prices for goods and services. Without them, decision-making becomes difficult, if not impossible.
Preventing investors from selling stocks to raise cash (which is what a stock market shutdown would do) could cause severe hardship.
With share market prices falling sharply, it’s tempting to think closing them will stem the losses, but it could trigger even more painful adjustments elsewhere.
<h2>Even short sellers have a place</h2>
Other countries have imposed bans on short selling, which is the sale of a share the seller does not yet own.
Short sellers profit by buying back shares at a lower price after they have sold them. They do it by borrowing rather than owning stocks. Their actions help the owners of stocks who want to protect their financial positions from further declines in price.
If owners can’t protect themselves in this way, they can be forced to liquidate shares, making the downturn even worse.
The global financial crisis gave us a wealth of experience with bans on short-selling, <a href="http://www.institutional-economics.com/images/uploads/pf19_-_Shooting_the_Messenger_The_Ban_on_Short_Selling.pdf" target="_blank">including in Australia</a>. The evidence from that experience overwhelmingly suggests short-selling bans were counter-productive.
Keeping markets open will be a painful experience for many, but closing them is the equivalent of shooting the messenger.
Eventually, they will signal better times ahead and give business the confidence to move forward with the recovery.<img src="https://counter.theconversation.com/content/134387/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;">
<a href="https://theconversation.com/profiles/stephen-kirchner-1726" target="_blank">Stephen Kirchner</a>, Program Director, Trade and Investment, United States Studies Centre, <a href="https://theconversation.com/institutions/university-of-sydney-841" target="_blank">University of Sydney</a>
This article is republished from <a href="https://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/itd-be-a-mistake-to-shut-financial-markets-more-than-ever-we-need-them-to-work-134387" target="_blank">original article</a>.
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j.ballantyne1990-6AQqhLzZaK

It'd be a mistake to shut financial markets: more than ever, we need them to work

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GUEST OBSERVER
As you all know, over the past couple of years, there has (quite justifiably) been a great deal of attention given to the implications of the first recommendation of the Financial System Inquiry (FSI): that APRA should set capital standards such that Australian authorised deposit-taking institutions (ADIs) would have capital ratios that are seen to be ‘unquestionably strong’.
Since that recommendation was published, much has been written about what it means – and given that it will be a little while before APRA is in a position to make a final determination on how we best meet this recommendation, no doubt much more will be. Today, I’ll simply repeat the point I’ve made previously: that the steady accumulation of capital remains a sensible course of action for most ADIs.
It’s always important to remember, though, that a stable and resilient banking system is not just delivered by more capital. Capital adequacy is a relative concept – is capital adequate relative to risk? When we judge a bank’s capital to be high or low, or something in the middle, we are making a judgement that takes into account a range of issues that impact on bank risk profiles: funding and liquidity, asset quality, governance, risk management and risk culture, to name a few, all come into the equation in some way or another.
We also need to remember there are no guarantees. No level of capital (short of 100 per cent equity funding) can provide creditors with an absolute guarantee against the possibility of bank failure. To pick up today’s theme, we can’t always ‘bank on capital’: something can always go wrong.
To attempt to provide the community with an iron clad guarantee that nothing can go awry would require severe limitation on the risk-taking ability of the banking system, and prevent it from fulfilling the vital and productive roles that it plays in intermediating between borrowers and lenders and facilitating the smooth functioning of payments throughout the economy. Put simply, a zero failure regime is not desirable.
Inevitably, we need to find a balance1. One implication of that is, even once we define and achieve ‘unquestionably strong’, we won’t be downing tools. In a world of fractional reserve banking, ‘unquestionably strong’ will never equate to ‘invincible’.
That in turn means we need to think about failure2. And when I use the word ‘failure’, I’m not just talking about a classic case of insolvency or bankruptcy, but using it more broadly to capture situations in which the on-going viability of one or more financial institutions is in serious jeopardy. 
The failure of a bank is not like the failure of a bakery. The potential for contagion to other financial firms, not to mention the widespread adversity it can impose on the broader community, means the failure or near-failure of a bank is no run of the mill matter. So, if we start with the proposition that failures are inevitable, then I’d suggest the regulatory system needs to be assessed against two benchmarks: are failures nevertheless sufficiently rare, and do we have mechanisms to handle them adroitly when they occur? 
If the answer to both these questions is yes, then community confidence and trust in the financial system is likely to remain high.
With that in mind, we can think of two basic types of failure: orderly and disorderly. 
To the extent we have failures, orderly failures are what we aspire to. Orderly failures will typically have been anticipated, produce no loss to protected beneficiaries,3  and be managed in such a way that the firm’s critical functions are maintained without disruption while the situation is resolved. (Shareholders and other providers of capital of the non-viable firm may very well lose out along the way, but that is their lot in life). 
To the extent any failure can be regarded as a success, then an orderly exit from the industry in this fashion is what we should strive for. For example, a firm that identifies it is approaching non-viability or a strategic dead-end, and seeks to merge with a stronger and more viable entity (sometimes with a nudge along the way from APRA) is a far from uncommon event in the Australian financial system. To the extent such exits can be classed as failures, or at least near failures, they are often so orderly that no one notices them.
Disorderly failures, on the other hand, are to be avoided. Disorderly failures will be those which catch everyone by surprise, impose significant losses on those who the regulatory framework seeks to protect, and/or involve significant disruption to the smooth operation of the financial system, and economic activity more generally. HIH Insurance would be the classic of this genre.
So what can we do to maximise the probability that failures will be orderly, rather than disorderly? I’d suggest there’s a number of preconditions that the public sector needs to put in place:4
<ul>
<li>active supervision is at the heart of identifying the risk of failure early – it will be hard to anticipate problems if there is no one looking for them in the first place;</li>
<li>powers to intervene must exist – this is critical to being able to address small problems before they become big ones;</li>
<li>a willingness to intervene is also critical – powers are of no value if there is no capacity or willingness to use them when needed5;</li>
<li>planning and preparation – ideally, contingency plans will have been prepared and tested in ‘peace time’ rather than thought up on the run in the midst of a crisis;</li>
<li>a capacity to maintain critical functions – an orderly resolution of a failure may take time, yet critical functions need to be maintained in the meantime; and</li>
<li>there will ideally be a safety net or backstop to provide additional confidence at a time of uncertainty – which will help avoid actions that are individually rational but collectively damaging (the typical case being a bank run). </li>
</ul>
APRA, along with our colleagues amongst the Council of Financial Regulators, has spent a great deal of time in recent years looking in a fairly hard-nosed way at how well Australia stacks up against these preconditions. The conclusion was somewhat mixed: there are no glaring deficiencies, but a number of areas for improvement.
The importance of active supervision, and a willingness to intervene where appropriate, were some of the hard lessons that APRA took to heart following the HIH episode. Justice Owen found APRA under-resourced to identify problems, and slow to respond to them once found. These were fair conclusions, and APRA worked hard under my predecessor to build both its capacity and conviction. Fifteen years on from HIH, efforts to further improve our supervision – to identify risks early and respond promptly – remain at the forefront of our latest strategic plan, and I expect they will always feature prominently in APRA’s priorities.
When it comes to powers to intervene, the FSI’s Final Report noted there are some gaps and deficiencies in the Australian statutory framework for crisis management and resolution when compared with international standards.6 This includes the need for such things as broader investigation powers; strengthened directions powers; improved group resolution powers; enhanced powers to deal with branches of foreign banks; and more robust immunities to statutory and judicial managers. In his speech last week, the Treasurer noted the Government’s intention to make improvements in this area, which we see as a very valuable (and low cost) investment in the stability in the financial system.
Crisis planning is critical. Last year at this event I spoke about our plans for recovery and resolution planning. During the past year, I’m pleased to say larger ADIs have submitted new plans based on updated guidance issued by APRA, and we are now reviewing and benchmarking the plans in order to highlight areas of better practice that will further increase the credibility of plans in subsequent iterations.7 On resolution planning, more detailed work is also underway with specific firms to consider the planning required to ensure that APRA is able to use our resolution powers when needed. Our focus here is on the assessment of critical functions, intra-group dependencies such as critical shared services, and the identification of potential barriers to resolvability.
No matter how good the plan, however, stabilising and restructuring a financial firm that is no longer viable in its current form is rarely going to be a quick and easy exercise. So it is important that, while a resolution plan is being implemented, the firm’s critical functions can be maintained so as to reduce potential losses and minimise the disruption to the broader financial system. Key to doing this is that the firm has the financial resources to allow it to continue to operate while its business is reorganised. 
Searching for new capital when a business is distressed, and time is of the essence, is ideally to be avoided. And we want to minimise the risk that the taxpayer has to come to the rescue. With that in mind, the post-crisis regulatory framework has built mechanisms that trigger automatic corrective action to help restore a firm’s capital when it has been diminished. There is a lot of discussion and debate on the merits of so-called bail-inable instruments and bail-in powers, including in response to the FSI’s third recommendation that APRA implement a framework for recapitalisation capacity sufficient to facilitate the orderly resolution of an Australian ADI and minimise taxpayer support.
But the idea of bail-in is not something completely new: certain recapitalisation mechanisms already exist in the Australian framework. Examples include:
◦                      the use of the capital conservation buffer, which imposes increasing limitations on a ADI’s ability to make discretionary distributions to capital providers and employees as the ADI approaches its minimum regulatory requirements;8
◦                      the trigger that exists in Additional Tier 1 instruments (often referred to as ‘hybrids’) that provide for the instrument to be written off, or converted to equity, in the event that an ADI’s capital ratio falls below 5.125 per cent; and
◦                      the point of non-viability trigger in both Additional Tier 1 and Tier 2 instruments, which provides for the instruments to be written off or converted to equity in the event that APRA considers that the ADI would become non-viable without such action (or some other form of support).
These latter two recapitalisation mechanisms, in particular, are designed to provide some ‘breathing space’ to allow for orderly resolution. They are not designed to deliver resurrection, but more modestly to provide scope for an ADI’s services to customers to continue while new owners and managers are being put in place. Strengthening this by increasing loss absorption and recapitalisation capacity further, as recommended by the FSI, remains a work in progress and likely to take some time to complete.
We are, as I have said elsewhere, hastening slowly in response to that recommendation given the importance of getting the policy settings right.
However, the new mechanisms that have already been instituted within existing capital instruments are a very important part of the new regulatory framework. Viewing these capital instruments as simply higher-yielding substitutes for vanilla fixed-interest investments, let alone deposits, is something to be counselled against, since from APRA’s perspective holders of these instruments are providing the important first lines of defence that we can call into action, in some instances even ahead of shareholders, to aid an orderly resolution.
Finally, despite these new mechanisms, having a safety net or backstop to provide additional confidence before and during a period of resolution is an important component of any resolution framework. Australian depositors have long had the benefit of the depositor preference provisions in the Banking Act 1959. In 2008, this was supplemented by the Financial Claims Scheme (FCS) which seeks to provide certain depositors with prompt access to their funds – up to $250,000 per account holder - in the event an ADI fails.9
But to achieve a prompt payout of protected deposits to account holders – something depositors must be confident of for the backstop to work as intended – requires that ADIs be operationally ready, prior to any failure, to meet payment, reporting and communication requirements for the FCS.10 Planning and investing to facilitate their own demise is something that financial firms inevitably struggle to do, so APRA will be reinforcing its expectations in relation to ADI’s FCS testing programs in the near future, with a view to ensuring there is genuine readiness to activate the FCS if it is ever needed. 
Concluding remarks
Adequate capital is undoubtedly critical to the stability of any banking system. But to return to today’s theme, we can’t solely ‘bank on capital’ to deliver safety and stability. If we accept that failures, while hopefully still reasonably rare, are nevertheless inevitable, then preparation to minimise their impact is an essential investment. ‘Successful failures’ might seem a contradiction in terms, but they are far better than the alternative.
Wayne Byres is a member and chairman of <a href="https://www.apra.gov.au/Pages/default.aspx" target="_blank">APRA</a>. 
 
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jchancellor-FAypfDUnLy

Finding success in failure: Wayne Byres

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<img src="https://counter.theconversation.edu.au/content/61949/count.gif" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
One of the lesser understood aspects of what you can do with massive stockpiles of data is the ability to use data that would traditionally have been overlooked or in some cases even considered rubbish.
This whole new category of data is known as “exhaust” data – data generated as a byproduct of some other process.
Much financial market data is a result of two parties agreeing on a price for the sale of an asset. The record of the price of the sale at that instant becomes a form of exhaust data. Not that long ago, this kind of data wasn’t of much interest, except to economic historians and regulators.
A massive moment-by-moment archive of prices of shares and other securities sales prices is now key to many major banks and hedge funds as a “training ground” for their machine-learning algorithms. Their trading engines “learn” from that history and this learning now powers much of the world’s trading.
Traditional transactions such as house price sales history or share trading archives are one form of time-series data, but many other less conventional measures are being collected and traded too.
There are also other categories of unconventional data that are not time-series-based. For example, network data outlines relationships and other signals from social networks, geospatial data lends itself to mapping, and survey data concerns itself with people’s viewpoints. Time series or longitudinal data is, however, the most common form and the easiest to integrate with other time-series data.
Consistent Longitudinal Unconventional Exhaust Data or CLUE data sets, as I’m calling them, are many, varied and growing. They include:
<ul>
<li>foot traffic data </li>
<li>consumer spending data</li>
<li>satellite imaging data</li>
<li>biometrics</li>
<li>ecommerce parcel flow data</li>
<li>technology usage data</li>
<li>employee satisfaction data.</li>
</ul>
Say, for example, you are interested in the seasonal profitability of supermarkets over time. Foot traffic data may not be the cause of profitability, as more store visitors doesn’t necessarily correlate directly to profit or even sales. But it may be statistically related to volume of sales and so may be one useful clue, just as body temperature is a good clue or one signal to a person’s overall well-being. And when combined with massive amounts of other signals using data analytics techniques, this can provide valuable new insights.
<h2>Rise of ‘Quantamental’ investment funds</h2>
Leading hedge fund Blackrock, for example, is using satellite images of China taken every five minutes to better understand industrial activity and to give it an independent reading on reported data.
Traditionally, there have been two main types of actors in the financial world – traders (including high-frequency traders), who look to make money from massive volumes on many small transactions, and investors, who look to make money from a smaller number of larger bets over a longer time. Investors tend to care more about the underlying assets involved. In the case of company stocks, that usually means trying to understand the underlying or fundamental value of the company and future prospects based on its sales, costs, assets and liabilities and so on.
A new type of fund is emerging that combines the speed and computational power of computer-based Quants with the fundamental analysis used by investors: Quantamental. These funds use advanced machine learning combined with a huge variety of conventional and unconventional data sources to predict the fundamental value of assets and mismatches in the market.
Some of these new style of funds, including TwoSigma in New York and Winton Capital in London, have been spectacularly successful. Winton was founded by David Harding, a physics graduate from Cambridge University in 1997. After less than two decades it ranks in the top ten hedge funds worldwide with US$33 billion in assets under advice and more than 400 people – many with PhDs in physics, maths and computer science. Not far behind and with US$30 billion in assets, TwoSigma also glistens with top tech talent.
New ones are emerging too, including Taaffeite Capital Management run by computational biology and University of Melbourne alumnus Professor Desmond Lun. Understanding the complex data dynamics of many areas of natural science, including biology and ecology, are turning out to be excellent training for understanding financial market dynamics.
<h2>Weird data for all</h2>
But it’s not only the world’s top hedge funds that can or are using alternative data. A number of startups are on a mission to democratise access to new sources. Michael Babineau, co-founder and CEO of Bay Area startup Second Measure, aims to offer a Bloomberg-terminal-like approach to consumer purchase data. This will transform massive amounts of inscrutable text in card statements into more structured data, thus making it accessible and useful to a wide business and investor audience.
Others companies, like Mattermark in San Francisco and CB Insights in New York, are intelligence services that provide fascinating and valuable data insights into company “signals”. These can be indicators and potential predictors of success — especially in the high-stakes game of technology venture capital investment.
Akin to Adrian Holovaty’s pioneering work a decade ago mapping crime and many other statistics in Chicago online, Microburbs in Sydney provides a granular array of detailed data points on residential locations around Australia. It allows potential residents and investors to compare schooling, restaurants and many other amenities in very specific neighbourhoods within suburbs.
We Feel, designed by CSIRO researcher Dr Cecile Paris, is an extraordinary data project that explores whether social media – specifically Twitter – can provide an accurate, real-time signal of the world’s emotional state.
<h2>Weird small data has its benefits</h2>
More than simply pop-economics, Freakonomics (2005) showed how unusual yet good-quality data sources can be valuable in creating insights. Assiduous record-keeping of the accounts of an honesty system cookie jar in an office place revealed that people stole most during certain holidays (perhaps due to increased financial and mental stress at these times); access to drug gangster book-keeping accounts explained why many drug dealers live with their grandparents (they are too poor to move out); and massive public school records from Chicago showed parental attention to be a key factor in students' academic success.
Many of the examples in Freakonomics were based on small quirky data samples. However, as many academics are aware, studies with small samples can present several problems. There’s the question of sampling — whether it’s large enough to represent a robust sample and whether it’s a random selection of the population the study aims to understand.
Then there’s the problem of errors. While one could expect errors to be smaller with smaller sample sizes, a recent meta-study of academic psychology papers found half the papers tested showed significant data inconsistencies and errors. In a small number of cases this may be due to authors fudging the results, whereas others may be due to transcription or other simple mistakes.
<h2>Weird data is getting easier to find</h2>
More and more large-scale unconventional data collections are becoming readily available. There are three blast furnaces driving its proliferation:
<ul>
<li>the interaction furnace: our own growing interactions with the web and web services (ecommerce, web mail, social media) etc</li>
<li>the transaction furnace: the increasingly online ledger of commerce</li>
<li>the automation furnace: an explosion of web-connected sensors.</li>
</ul>
While large data collections can’t help with avoiding fabrication, they can sometimes help with sample size and representation issues. When combined with machine learning they can:
<ul>
<li>provide accurate insights from incomplete, noisy and even partially erroneous data</li>
<li>offer associations, patterns and connections — blindly with no a priori assumptions</li>
<li>help eliminate bias — by invoking multiple perspectives. </li>
</ul>
<h2>What can we expect from more clues?</h2>
We may see unexpected results and be surprised about the degree to which many factors such as social and personal information are highly predictable using unexpected data signals. Michael Kosinski and his colleagues showed the predictive power of social media data in the analysis they published in PNAS in 2013. They demonstrated that highly personal traits such as religion, politics and even whether your parents were together when you were 21 were highly predictable using Facebook likes alone.
We will see a plethora of applications emerge that take advantage of processing unconventional data sources. One rich area is biometrics. Australian tech startup Brain Gauge has shown that people’s voices can be uses as signal for cognitive load and used for real-time detection of stress levels and reduced absenteeism in call-centre staff, for example.
We can also expect to see a lot more meta-analysis of communities, populations and industries. Increasingly ambitious studies are now possible that combine and link massive, often disparate data sets together to yield new insights into economics, law, health and many other areas of research. One example is the recent meta-study published in the Journal of the American Medical Association that combined nine other studies and found that walking speed in older adults is indeed a predictor of longevity.
Paul X. McCarthy is adjunct professor, UNSW Australia and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/paul-x-mccarthy-108227" target="_blank">here</a>.
 
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