Australian banks still face many liquidity challenges

Australian regulators are working hard to provide a fitting solution to the liquidity conundrum facing institutions ahead of the implementation of new Basel III regulations. For the moment, a committed liquidity facility guaranteed by the Reserve Bank of Australia will ensure Australian banks meet the new requirements. But in the longer term, market participants hope other alternatives will become available. Wietske Blees reports

Australia has long been in a somewhat peculiar situation compared to the rest of the world. While most developed nations’ governments are swamped in debt following the global financial crisis that took hold in 2008, financial institutions in Australia face the opposite problem – a government focused on repaying the remainder of the debt it amassed during the downturn and a shortage of such bonds. While, comparatively speaking, that might be a good position to be in, when placed in the context of