Moody's latest on Australian banks
- The unwinding of the global commodities cycle is heightening the macroeconomic risks faced by Australian banks
- Regions and sectors most exposed to mining are starting to see some signs of stress
- "Although the banks' direct exposure to the resources sector is relatively low, they face high second-order risks from a potential sharp downturn"
- "These risks are somewhat mitigated by the current low interest rates and the relatively healthy state of Australian corporate balance sheets and, on balance, we expect the banks' credit costs to increase only moderately from the current low levels"
- Risks in Australia's housing market skewed to the downside ... poses a challenge to the banks, given that residential mortgages dominate their loan books
- The likelihood of an outright house price correction remains low, tail risks are rising
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Moody's report is titled "Heard From the Market: Macroeconomic Risks and Evolving Regulations Dominate Investor Concerns"
Looks to be little we weren't already aware of.
