Banks could withstand a crash

The International Monetary Fund has been impressed with the strength of the Australian financial system and its supervision according to APRA. The IMF has been stress testing the Australian financial system, requiring banks to apply doomsday scenarios to their balance sheets. In preliminary results, it says Australia’s banks could withstand a recession and sudden change in the mood of international investors. The IMF said looking at the financial system and institutions was more important than the current account in predicting how an economy might react to sudden changes in circumstances.