The banking wrap 2: scrapping over sector stress 12 June 2009 4:43PM Greg Peel of FNArena While having little new to report on an individual basis, bank analysts were still happy to assess various sector-wide factors this week.BA-Merrill Lynch notes the futures market is now pricing the RBA cash rate to reach 4.0 per cent to 4.50 per cent in 2010. The RBA left its cash rate on hold earlier this month but maintained what Merrills describes as an "easing bias" in its accompanying statement on monetary policy. Merrills expects the cash rate to trough at 2.50 to 2.75 per cent some time in the second half of 2009 but suggests an expectation of cash rate of four per cent or more bodes well for bank lending margins. The banks would have breathed a sigh of relief the RBA did not cut this month, given they are under pressure to provide reasonable deposit rates and are still facing expensive term funding.RBS is currently looking under every rock in a hope to find more evidence to support its decidedly bearish stance on the bank sector. One suitably grimy piece of news was the Australian government's intention to reduce the maximum bankruptcy period from three years to one year, at least in cases of personal insolvency.The RBS analysts note a similar law change in Britain in 2004 resulted in a material increase in the number of personal bankruptcies, and a near doubling of personal loan write-offs. And that was during a boom.On a brighter note, Goldman Sachs JB Were has otherwise pointed out that the percentage of "distressed" companies in Australia dropped to 0.12 per cent in April from 0.16 per cent in March. The month-on-month improvement was driven by a 23 per cent fall in the number of insolvent companies and a 26 per cent fall in the number of companies in administration.