ctindale, page-20

It is good to remember that the only reasons the Australian big four (+MacBank) avoided the worst of the GFC were :

1) our regulator, APRA, was not asleep at the wheel -> the real issue was active supervision not more regulation as some suggest in the US. APRA directly intervened with MacBank getting them to increase the duration of their debt (luckily) prior to the collapse in cash liquity.

2) the Australian banks were just too slow getting onto the credit derivative bandwagon. by the time they got around building this business it went belly up before their exposure grew too large.

3) we don't have no-recourse loans in Australia which reduces the risk of houses being dumped on the market and the banks carrying the full cost.

4) interest rates were relatively high prior to the GFC which meant that lowering interest rates by the RBA had a very material positive impact on reducing probabilities of default.

In summary the Australian banks do not have anything particular special in their own right which warrants a price premium compared to their global counterparts... for me a position (under or over weight) in Aust bank shares would be a proxy for a position the overall Australia economy only at this stage.