The Reserve Bank of Australia’s Financial Stability Review finds that Australia’s financial system remains resilient, but warns that mounting global and operational vulnerabilities require financial institutions to strengthen their capacity to withstand shocks and recover from crises. Geopolitical tensions and growing vulnerabilities in global financial markets have elevated external threats, while advances in artificial intelligence and service provider disruptions are increasing operational risks. Most mortgage households remain well placed to manage more difficult conditions, including a sharp fall in housing prices. Most businesses should also be able to absorb elevated cost pressures, although some sectors face greater challenges. Australian banks are positioned to continue lending through a significant downturn, and risks from domestic nonbank financial institutions remain contained.
Reserve Bank of Australia finds financial system resilient as global and operational vulnerabilities mount
The Reserve Bank of Australia finds that the financial system remains resilient, with banks positioned to keep lending through a significant downturn. Mounting geopolitical, global market and operational risks require financial institutions to strengthen shock resistance and crisis recovery capabilities.