Aussies choose savings over debt
New figures show deposits on the books of Australian banks keep rising dramatically, relative to loans, as consumers address their new-found craving to save. In the year to October, deposits climbed 10 per cent while total credit growth clocked in at only 3.5 per cent.
The ratio of loans to deposits in the Australian banking sector now stands at 149 per cent – indicating that the banks have $1.49 owed to them for every $1 of savings on their books.
From the late 1980s, when the ratio was at parity, it soared over two decades to peak at 183 per cent in March 2008.
Australian banks are regarded among the strongest in the world. But the lack historically of a strong savings culture in Australia means the banks have had to secure much of their funding in offshore wholesale markets.
Source: Herald Sun