A stress test of Australia's 20 largest banks under a scenario of a severe economic downturn shows the banking system would remain resilient with no banks failing, Australian Prudential Regulatory Authority Chairman John Laker said.
In a scenario of a severe economic downturn, APRA's results show no bank would have failed, none would have breached the minimum 4% tier one capital buffer banks are required to hold under the Basel II Framework and the weighted average fall in the tier one ratio over the span of the three-year stress period would have been 3.1 percentage points.