The Australian Financial System

Description

The Australian financial system remains in good condition, with banks’ resilience to adverse shocks having increased over recent years. Banks’ capital ratios are above regulatory minimums and those of most international peers (when measured on a comparable basis). Capital generation is being supported by high levels of aggregate profit, though there has been little growth in profit over the past couple of years.
Banks’ assets also continue to perform strongly; the charge for bad and doubtful debts remains low and non-performing assets have stabilised over the past six months, after increasing a little in the first half of 2016.