|Aussie banks safe from shock|
|Thursday, 10 June 2010 00:00|
Source: Broker News - www.brokernews.com.au
Australian banks could survive an economic contraction the size of the 1990s recession, the Australian Prudential Regulation Authority has revealed.
According to a report in the Australian Financial Review, APRA chairman John Laker ordered a stress test to be conducted on the country's largest lenders to determine what would happen if there were a three-year deterioration in global economic conditions. The Reserve Bank of Australia and New Zealand's central bank also took part in the examination.
Laker said the results showed Australian banks had the capital resources to weather such a contraction. In fact, none of the 20 banks tested would have failed or even fallen below the minimum amount of top-rated assets on their balance sheets.
However, Laker warned banks not to get complacent and take part in the high-risk activities that caused the economic downturn overseas.
Source: Broker News, 10th June, 2010 - www.brokernews.com.auhttp://www.brokernews.com.au/news/breaking-news/aussie-banks-safe-from-shock/46410