Fitch Ratings: Australian Banks Most Vulnerable To Europe’s Debt Crisis

26 Jun

From the Australian:

Australian and South Korean banks are the most exposed in Asia to Europe’s debt crisis given their large dependence on offshore wholesale funding markets, a senior official at Fitch Ratings said today.

While the direct exposure is low, if the Greek debt crisis implodes and spurs a major dislocation in global credit markets, Australia and South Korea’s banks and economies would suffer the most, said Andrew Colquhoun, head of Asia-Pacific sovereign ratings.

“Among the countries in Asia I would regard as relatively more exposed are both Korea and Australia, who have an issue of short-term and long-term external debt of the banking system,” he told Dow Jones Newswires on the sidelines of a conference in Sydney.

“If the banks found it more difficult to refinance that debt, then there could be repercussions for the economies,” he said, adding “quite a lot” of risk still remains in the process to firm up a second bailout package for Greece.

Australia’s four biggest banks have in recent years leaned heavily on foreign currency borrowing and were among the biggest issuers of debt in the world using their respective governments’ funding guarantees during the financial crisis.

Learn all about just how vulnerable our banking system really is, in these recent posts –

“Our Banking System Operates With Zero Reserves”

Fresh Evidence Our Banks In ‘Race To The Bottom’ Means You Can Kiss Your Super Goodbye”

“Fitch’s: Residential Mortgage-Backed Securities Negative, Threat To Banks”

“By Hook Or By Crook – Moody’s Says Our Banks Are Too Big Too Fail”

“Tick Tick Tick – Aussie Banks’ $15 Trillion Time Bomb”

One Response to “Fitch Ratings: Australian Banks Most Vulnerable To Europe’s Debt Crisis”


  1. Australian banks vulnerable . . . still : third wave group - August 23, 2011

    […] And, it is why Fitch Ratings considers Australia’s banks “most exposed” to the European debt crisis. […]

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