A senior Reserve Bank official says Australia’s banks are “unquestionably strong” regardless of monetary stability considerations rocking international markets.
The remark by Reserve Bank of Australia assistant governor for monetary markets Christopher Kent comes within the wake of UBS Group’s takeover of troubled rival Credit Suisse.
The drama surrounding the most important Swiss financial institution, coupled with the failure of two smaller US banks prior to now fortnight, has sparked considerations over the well being of the worldwide monetary system.
In a speech to KangaNews DCM Summit in Sydney, Dr Kent mentioned volatility in Australian monetary markets had “picked up” however they had been “still functioning”.
“And, most importantly, Australian banks are unquestionably strong – the banks’ capital and liquidity positions are well above the Australian Prudential Regulation Authority’s regulatory requirements,” he mentioned.
“Banks are already well advanced on their bond issuance plans for the year and could defer their bond issuance for a while,” he added.
“Even if markets remain strained for a time, Australian banks’ issuance will continue to benefit from the strength of their balance sheets.”
Under the Credit Suisse deal brokered in a single day, Swiss banking large UBS can pay three billion Swiss francs ($A4.82 billion) for its largest rival and assume as much as $US5.4 billion ($A8.1 billion) in losses.
The deal can be backed by an enormous Swiss assure and is predicted to shut by the tip of 2023.
The acquisition follows efforts in Europe and the United States to assist the sector for the reason that failure of US lenders Silicon Valley Bank and Signature Bank.
Source: www.perthnow.com.au
