Australian Reserve Bank warns of household debt

19:41, June 09, 2010      

Email | Print | Subscribe | Comments | Forum 

Australian Reserve Bank governor Glenn Stevens said on Wednesday the rapid deterioration of Europe' s debt crisis should serve as a warning for Australian households to reduce their debt.

Stevens noted the biggest lesson from the Greek debt crisis is that financial markets can ignore problems they know about for a long time, before a catalyst creates a sharp reaction.

"Markets can happily tolerate something for an extended period without much reaction, then suddenly react very strongly as some trigger brings the issue into clearer focus," he told a business function in north-west Sydney.

Stevens said Australia's public and corporate debt is very low compared to other countries, but the nation's vulnerability is its relatively high level of household debt.

"The big rise in debt in the past couple of decades has been in the household sector," he warned.

"There have been many reasons for that and, overwhelmingly, households have serviced the higher debt levels very well.... So, to be clear, my message is not that this has been a terrible thing.

"But that doesn't mean it would be wise for that build-up in household leverage to continue unabated over the years ahead."

Source: Xinhua

(Editor:王千原雪)

  • Do you have anything to say?

双语词典
dictionary

  
Special Coverage
  • Premier Wen Jiabao visits Hungary, Britain, Germany
  • From drought to floods
Major headlines
Editor's Pick
  • Giant red lantern lights up in Tiananmen Square to celebrate the coming National Day on Oct. 1. (Xinhua/Li Xin)
  • A ceremony is held in Taipei, southeast China's Taiwan, on Sept. 28, 2011, to commemorate the 2,562nd birthday of Confucius (551-479 BC), a Chinese thinker, educationist and philosopher. (Xinhua/Wu Ching-teng)
  • The world's first Boeing 787 Dreamliner for delivery arrives at Haneda airport in Tokyo, capital of Japan, on Sept. 28, 2011. The Boeing 787 Dreamliner, whose buyer is All Nippon Airways (ANA), will implement a flight of ANA on Oct. 26 from Tokyo's Narita Airport to Hong Kong in south China. (Xinhua/Ji Chunpeng)
  • A Libyan National Transitional Council (NTC) fighter shows what is believed to be human jawbone found inside a mass grave near Abu Salim prison in Tripoli, Libya, Spet. 27, 2011. The NTC on Sunday said they had found a mass grave containing the bodies of 1,270 people killed by Gaddafi's security forces in a 1996 massacre at Abu Salim prison in southern Tripoli. (Xinhua/Li Muzi)
  • Rescue workers and local residents search for survivors after a building collapsed in old Delhi, India, Sept. 27, 2011. At least 10 people were killed and 35 injured when an old three-storey building collapsed. More than a dozen people are still feared trapped under the debris, police said. (Xinhua/Partha Sarkar)
  • A visitor has flying experience in the windmill castle of Jinshitan National Holiday resort in Dalian, northeast China's Liaoning Province, Sept. 27, 2011. The castle is a 23-meter-high building with 21 meters in diameter. The castle uses wind tunnel to make objects floating in the air. It is the first indoor stadium in China, which enables people to have flying experience. (Xinhua/Zhang Chunlei)
Hot Forum Discussion