Australia in good shape to deal with global turmoil, says central bank chief

by Richard Kilner

Story link: Australia in good shape to deal with global turmoil, says central bank chief

Governor Glenn Stevens, the chief of Australia’s central bank, has described the global financial turmoil as unsettling.

The comment was made in an address to a financial markets conference, and followed up by a confident addition that he believed the Australian system was in a good shape and resilient enough to withstand the difficulties.

However, the governor added that he believed the worldwide economic turbulence would continue for some time, despite the actions of central banks across the globe.

He singled out the US as an example of where a major economy had entered a downturn, but added that Australia had relatively little exposure to the US subprime mortgage crisis that caused the credit crunch.

Australian banks have been increasing rates on mortgages to help make up for the increased costs they incur when borrowing in the tightening credit markets.