One of the most important players in international finance is warning today that Australia’s big banks are not immune from a looming threat to global stability.
The Bank for International Settlements has found that Australia’s big four lenders are again the most profitable in the developed world, but the organisation says rising interest rates will make our banks more unstable.
The world’s central banks, including the Reserve Bank of Australia, are known for using understated language to convey very serious economic messages.
However, Claudio Borio, the head of the Bank for International Settlements Monetary and Economics Department has been explicit about the risks facing the global economy.
He spoke via a teleconference ahead of the release of the bank’s annual report on Sunday in Switzerland.
“Some seven years after the financial crisis broke out, the global economy is still under its shadow: growth has picked up; very sustainable and balanced expansion may yet prove elusive,” Dr Borio cautioned.