Implications of the global risk environment for Australia At this point it is useful to ask how these international sources of risk might affect the Australian financial system. Direct exposures of Australian banking institutions to the risk factors I have been describing are quite limited (Table 1).
Exposures to the euro area have been scaled back in the wake of the crisis and now represent only around 1 per cent of Australian banks’ consolidated global assets. Although exposures to the Asian region have been growing quite rapidly over recent years, they are still a relatively small share of consolidated assets – around 5 per cent.