In Australia, banks are not required to hold any level of capital reserve with The Central Bank, RBA.. Instead, they are required to hold "adequate" capital levels on their published balance sheets. And the capital levels can be easily manipulated by issuing bonds, which can easily be purchased by those "investors" who are funded by the banks' loans. These give the banks unlimited lending capacity. It is really dodgy. They are lending something that does actually exist. Australian banks will face unprecedented fall in the near future.
