SYDNEY, March 27, 2008 (AFP) – The Australian financial system had coped better with the recent global strains than many other countries, the central bank said Thursday in its half yearly financial stability review. The banking system remained highly profitable and well capitalised, with the banks having minimal direct exposure to the subprime problems in the United States, the Reserve Bank of Australia (RBA) said.
The credit ratings of the larger banks remained high, with none of them having been put on negative credit watch or having their ratings downgraded.
“This strong standing of the banks has contributed to rapid growth in their deposits over the past six months, and they continue to be able to raise significant volumes of funds in both domestic and international capital markets,” the central bank said.
The RBA said the solid position of the Australian banking system partly reflected the high quality of its assets, with the banks having considerably less risky portfolios than banks in many other countries.
Ratios of non-performing loans to total loans remained at low levels, with arrears rates having declined over the past six months.
But the bank said the changed global credit market