Malcolm Edey, assistant governor of the Financial System of Australia, recently spoke about issues concerning the nation’s financial situation. He mentioned several factors that contributed to Australia’s steadfast recovery amidst the global financial crisis, attributing resilience within the financial sector in part to an economy still growing despite the severe recessions affecting other nations, in particular Europe and as the US. Most banks stayed profitable and since the crisis have strengthened their capital and liquidity positions.
He talked of his responsibilities at the Reserve Bank of Australia as including the production of the half annual Financial Stability Review, which provides information on the developments and risks encountered by the financial system, both domestic and international. He said that according to the reports from the Review Australia has already passed the most intense stage of the financial crisis. It corresponded more or less to the six month period starting from September 2008 until March 2009, which followed the fall of Lehman Brothers, as well as the other high-profile losses in Europe and America.
Edey said that it was a period of huge losses in global equity prices, and severe dislocation in credit markets. Banks worldwide announced their losses, and there was a contraction in output and trade across Asia, Europe and the US.
Financial conditions within the global economy have since improved, with China at the forefront of economic growth followed by India and other developing nations.
He said that countries which were severely affected by the crisis are showing signs of recovery with banks returning to profitability, recovery in the asset quality in banking systems, equity markets showing signs of recovery from their 2009 slumps, and improvements in credit market conditions.
