Australian Financial Crisis

Financial crisis is important to every country. In every country, they always have a chance getting financial crisis, therefore Australia might get financial crisis in further years. Banks can reduce the likelihood of having financial crisis in the country. They are also the main idea of financial crisis in everywhere. Many possible ways to have financial crisis in a country, and Australia financial system helped government to reduce the damage from 2008 international crisis, many countries expect Australia have serious problem and impact after crisis. Australia financial crisis can cause by banking and housing, it can avoid one crisis but may not evade the second, so they should find solution to avoid the crisis come.

Financial crisis is

In 2008, there are global financial crisis because there are too many irresponsible borrower and could not afford to pay their loans back. The governments and central banks has protected the crisis, such as sizeable fiscal stimulus large reduction in interest rates, deposits the guarantees of bank and issuance, therefore let Australia has less considerably effect. The most effect in Australia is having a better growth outcome, but the experienced severe recessions and unemployment rises. After the crisis, the Australian banks still have profitable and no need any injections from government. With other impact from the crisis, households in Australia, they increase about 10 per cent of the prices and the Australian dollar also depreciated quickly. The Australian banking system has helped to improve the effectiveness of the financial and economic response, it show by large easing in monetary

It hard to raise funds on the international markets, and this happen to many country. Also in Australia, it has the worst housing property bubble in the world, it higher than New Zealand, UK, Canada and US. When people want to buy houses in Australia, they need to borrow found to pay the debts, therefore it might let banks faces many loans and make banks had a liquidity crisis. When bank makes a loan, they will create new money. Too much money and too quickly will drop the cash value in the world. Those moneys used to push up prices of houses and speculate on financial markets. There are 31% of the money went to residential property, 20% went to commercial real estate, and 32% went to financial markets, others 16% is personal loans and banks. Therefore, these affect the markets to drop and slowdown in lending, this is causing the financial crisis in bank or even country. The Banks having trouble in these days, because bank do not obtain many small size businesses overdraft, therefore those businesses cannot pay wages or creditors, and make them have to lay off staff or closing down. Australia banks using overwhelming debt to keep country save but cannot solve the problem in long term. There are also many businesses cannot find another repaying sources, hence become shutdown of the business.

If Australia want to avoid the next financial crisis, then