The Reserve Bank of Australia (RBA) today released its October 2026 Financial Stability Review.
The Review finds that Australia's financial system has a good degree of resilience, but global and operational vulnerabilities continue to mount and reinforce the need for financial institutions to strengthen their ability to withstand shocks.
The RBA assesses that:
- Most Australian households with mortgages remain well placed to manage more difficult conditions, even if housing prices were to fall sharply, although there are pockets of stress.
- Most businesses should be able to manage elevated cost pressures, although conditions are more challenging in some sectors.
- Australian banks are well positioned to continue lending, even in a downturn, while system-wide risks to stability posed by non-bank lenders remain contained by their relatively small size.
The Review highlights elevated threats from ongoing geopolitical tensions, growing vulnerabilities in global financial markets, advances in artificial intelligence and critical service provider disruptions.
In this environment, it is important that financial institutions continue to build resilience to financial, operational and geopolitical shocks and that crisis preparedness plans are strengthened.
