Australian Banks Given 1 Week To Prepare For European Meltdown!!!

According to the Australian Finance Review (link – subscription required), banks down under “have been given 1 week by regulators to stress test how they would handle a spike in joblessness, plunge in home prices spurred by EU debt crisis.” Aka a European “Meltdown.” And since we don’t have immediate access to the article, we leave it to Bloomberg First Word to describe for us what the article says:

* Australian Prudential Regulation Authority envision worst-case scenario of 12% unemployment, 30% drop in house prices, 40% fall in commercial property values, AFR says
* Banks will assume that write-offs, other mitigation measures are unavailable; later stress tests might allow for such steps, AFR says
* Australia’s banks have A$87.2b of exposure to Europe, or 2.7% of assets, with A$74.6b of it mostly tied to bank borrowers in France, Germany, Netherlands, AFR says, citing RBA statistics


[link to www.eutimes.net]