Australia’s banks are well in excess of their capital adequacy requirements and sufficiently regulated, leaving them well-placed to ride out global volatility.
Jim Chalmers says Australia’s banks are more robust now than before the GFC.“The collapse of Silicon Valley Bank and Signature Bank in the US and the takeover of Credit Suisse has sent waves through global financial markets over the past month but Australian banks are well-capitalised, well-regulated and well-placed to deal with this new source of volatility in the global economy,” he says.
“From 1 January 2023, APRA’s unquestionably strong framework for bank capital further strengthened capital requirements for Australian banks, ensuring that Australian regulations not only align with, but in many cases exceed, global standards,” he says. The collapse of the US banks earlier his month, the subsequent takeover of Credit Suisse by UBS and share price volatility with Deutsche Bank last week have combined to fuel fears of a contagion similar to that which tore through the global banking sector in 2008.
“This week I convened the Council of Financial Regulators, including the Australian Prudential Regulation Authority , Australian Securities and Investments Commission , the Reserve Bank and the Treasury, to ensure we are closely monitoring and regularly keeping across market developments, as regulators in the US and Europe act to boost liquidity and stabilise their financial systems,” he says.
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