RBA Financial Stability Review: Slowdown in China could trigger global economic downturn

The Reserve Bank of Australia's Financial Stability Review released a few minutes before press time, revealed growing concerns about a slowdown in China and its repercussions on the global economy. 

Key quotes (Source: Reuters)

  • Risk global financial volatility could rise for a number of reasons.
  • Trade tensions, a slowdown in China could trigger a global economic downturn.
  • The Australian economy is improving but the housing market has slowed.
  • Sentiment toward housing market has become more cautious, outlook subdued.
  • Drop in home prices to date has been small relative to previous gains, rapid or large fall in home prices could disrupt financial system, household finances.
  • The level of household debt is high but does not appear to be a large risk to the financial system.
  • Debt levels could be a risk if they cause households to cut back on consumption.
  • Possible, but not likely, excessive tightening in lending standards could fuel housing slowdown.
  • The resilience of the financial system overall has improved, capital ratios are strong.
  • Banks' returns on equity have declined but still high by international standard.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these securities. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Forex involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.

RELATED TOPICS