Resilient Australian financial system, limited risks

In its half-yearly Financial Stability Review (FSR) released on Thursday, the Reserve Bank of Australia (RBA) said “Australia’s financial system is resilient, risks contained”.

Supplementary food

Risks include stress in China’s financial sector, lack of a meaningful response from Beijing.

Low global risk premiums, high leverage increase the danger of disorderly declines in global asset prices.

Financial system vulnerable to digitization, concentration of ai/cloud providers.

Raising the pension to a quarter of the financial system could amplify the shocks.

The risk of widespread financial stress in Australia remains limited.

A small but growing share of Australian home borrowers have fallen behind on their payments.

Only about 2% of all owner-occupier borrowers are in real danger of default.

Less than 1% of owner-occupant loans more than 90 days delinquent.

About 0.5% of delinquent home loans are estimated to be in negative equity.

The vast majority of borrowers expect to be able to continue paying off their debt.

He sees households risking excessive debt once interest rates fall.

Australian banks are well capitalized, profitable and have low exposure to bad debt.

Strengthening the operational resilience of banks is a priority for regulatory authorities.

Market reaction

AUD/USD was last seen trading 0.18% higher at 0.6835, supported by the encouraging FSR report.