The number of Australian borrowers unable to repay their debts is set to rise in the coming months according to Reserve Bank assistant governor Malcolm Edey.
In a speech given to the Retail Financial Services Forum in Sydney today, Edey said that the number of bad debts is set to rise in the next few months, given the current environment. The current impairment rate for loans held by Australian banks stands are just over 0.6 percent and is expected to rise.
Edey also said that in the wake of global banking reforms, banks will have to hold more capital and take less risk.
However, over all he said that Australia’s financial system is in a much better position that it’s international counterparts and there are encouraging signs that the economy is improving.
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