Australian Banks and Economic Environment Positive
In a world analysis Australian banks have been found to pose a low degree of risk to the global financial system. According to Dr Robert Engle, the 2003 winner of the Nobel Prize in Economics and a professor of finance at Stern School of Business at New York University, the Australian banking system is robust and capitalized enough to endure another financial crisis.
He said the economic environment was positive from an Australian perspective and that the liquidity measures that had been implemented were proving to be effective. The comments were made as part of Dr Engle’s presentation on systemic risk within the worldwide financial system, at a conference endorsed by the University of New South Wales.
Asian and U.S. Banks Pose Greater Risk than Australian Banks
His financial analysis of a number of banks from advanced economies demonstrated how some of the Asian banks put the financial system at risk. The analysis found Japanese banks to pose the greatest risk when it came to recapitalization costs, at $700 billion. The United States followed in second place with $600 billion. As far as systemic risk in Europe is concerned the UK came in first with $400 billion, followed by France with $350 billion. Dr Engle said that Australia had the potential to balance out the volatility posed by Asian financial systems but that France had to be watched carefully in Europe, as the center of stability in the Eurozone. The systemic risk [Read more...]