Australia joins global race to top on bank capital
Hong Kong
AUSTRALIA did not suffer in the global financial crisis. Yet it continues to behave as if it did. In the latest example of the country's state of mind, a government-backed inquiry has recommended that banks' capital ratios should be "unquestionably strong" when compared with international peers. It's a conclusion that commits Australia to joining a worldwide race to the top when it comes to financial safety.
The commission headed by former Commonwealth Bank chief executive David Murray offers a rare example of a country trying to mend its financial stable door before, rather than after, a catastrophe. Its final report contains 44 mostly sensible recommendations for improving Australian banks and markets. The most far- reaching is the suggestion that banks' capital ratios should be in the top 25 per cent of international peers.
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