It concludes that in an environment in which bank loans are widely used as collateral for asset-backed securities, a sudden increase in borrower default rates could have implications on the financial performance of banks not only via credit risks, but also through market and income risks.
11  Plumb M, C Kent and J Bishop (2013), “Implications for the Australian Economy of Strong Growth in Asia”, RBA Research Discussion Paper No 2013–03. 4  BIS central bankers’ speeches  A change in the growth of wages (in Australian dollar terms) is also an important source of adjustment.