The Australian economy is well-positioned to weather global financial difficulties and even better positioned to cope than many other countries, according to the RBA.
In its quarterly Financial Stability Review released today, the RBA said that considering recent strains in the global economy, Australia’s financial system had so far fared much better those of many other countries.
Notwithstanding Australia’s favourable position however, the RBA conceded that the impact of changing credit conditions had left its mark on the domestic financial system.
Changes in the cost and availability of funding “are having a significant effect on the nature of competition within the system”, the RBA said, “in particular the market for securities backed by housing loans have been disrupted, with new issuance drying up”.
However a resilient financial system, coupled with a favourable outlook for the domestic economy, should see Australia well positioned to cope with global uncertainties, the bank said.
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