Yesterday I posted about how vulnerable Australia’s banking system is to the spreading debt contagion in the Eurozone. It seems that ANZ chief Mike Smith shares the concern for the same reason – our banking system’s heavy reliance on getting funding from the international markets, which are again beginning to freeze up due to concerns about counterparty risk.
From Business Spectator:
Australia and New Zealand Banking Group Ltd (ANZ) chief executive Mike Smith has warned that sovereign debt problems in Europe have the ability to affect Australian markets.
Speaking to reporters after the bank’s first-half results were released, Mr Smith said the “contagion issue is now very real”, in reference to Europe’s sovereign debt problems.
Mr Smith said the crisis may affect Australia in terms of its dependence on access to the international credit market, and said the concern was very relevant to businesses across the country.
“I think it will probably have an effect on equity and credit markets, but credit markets I think is more relevant to the Australian situation,” he said.
Barnaby Is Right 
i think the real problem is not about any direct or immediate threat to banking in Australia. But in the short, to medium term, as the rest of the worlds economies, other than BRIC/OZ continue spiralling downwards, their demand for Chinese Big screen TV’s, toys, etc, will eventually slow down the BRIC economies as well, reducing our mineral exports.