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It should be re worded to:"banks appear to be bail-able to a...

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Pavlov’s Dawg

1,433 Posts.

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15/09/20

16:34

Post #: 47359746
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Originally posted by Menta: ↑

"A 40 per cent fall in Australian house prices is an "extreme but plausible"' scenario, according to a Reserve Bank of Australia discussion paper on household debt.

But the paper says "banks appear resilient to a severe downturn" and that most household debt is held by those who can afford it.."

Most Australian's wealth is tied up in property and shares (most super funds are also heavily invested in shares).

So what if house prices fall 40% and share prices fall 80% over the next few years?

They haven't even considered this potential threat to the banking system and the economy in their modelling.

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It should be re worded to:

"banks appear to be bail-able to a severe downturn" and that "most household debt is recoverable through "bail in" from those who hold savings to cover the short fall."

Last edited by Pavlov’s Dawg: 15/09/20
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