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By: Jessica Darnbrough
Australia’s banking institutions are vulnerable to the debt crisis in Europe, according to Moody’s Investors Service.
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Speaking at a conference in Singapore yesterday, Moody’s Asia Pacific Financial Institutions senior vice president Deborah Schuler said Australian banks were likely to suffer the repercussions of Europe’s debt crisis because they fund much of their loan book from global capital markets.
Ms Schuler said Australian banks would need to maintain the maturity profile of their funding book to avoid ratings issues in the future.
But despite this concern, Moody’s said the lenders still have a significant buffer to cushion potential difficulties in the short term.
