Aussie banks have weathered economic storm: RBA

Australian financial institutions have fared much better than many of their global peers during the economic crisis, and market conditions are steadily improving, the Reserve Bank said today.

“The Australian financial system has, throughout the crisis period, remained resilient,” the RBA said in its September financial stability review .

“In aggregate, the Australian banks have experienced only a modest decline in profitability,” the review states. “[And] conditions in funding markets for Australian institutions have been improving.”

Investors are becoming more willing to take risks as the economy recovers, the RBA said, and banks have in return been more willing to fund risky investments.

But the report adds that global financial conditions remain “challenging” and that there’s no guarantee that further setbacks won’t emerge.