RBA Financial Stability Review

The Australian financial system has coped better with the recent strains than have those of many other countries, notes the latest Financial Stability Report from the Reserve Bank of Australia (RBA).

"The banking system remains highly profitable and well capitalised, with the banks having minimal direct exposure to the subprime problems in the United States,"the central bank says.

The RBA sounds a cautionary note, however: "Notwithstanding this favourable position, the changed credit environment

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