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Australian banks, a matter of trust

Countless hours have been dedicated to commentating on the dramatic collapse of Silicon Valley Bank and subsequent takeover of Credit Suisse. Investors and regulators alike have contemplated the implications of this spectacle and in particular the contagion risk to deposit confidence in the banking system in the US and beyond. US regional banks have been in specific focus with rapidly rising rates highlighting their balance sheet asset liability mismatch and risks to profitability.

Trust is at the crux of these anxieties.

Closer to home, recent commentary from Australian financial regulators is of a sanguine outlook for the Australian banking system with the recent speech by APRA Chair John Lonsdale representing the view that “we might be connected but their issues and problems are not necessarily ours” and followed up with a publication of stress test results indicating banks would survive the ruinous scenarios painted...

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