I want to stress that these risks come from international markets, not the domestic ones. Even though Australian share prices have fallen, compared with others they have done so by a smaller amount, from a much lower peak, and the fall has been much more recent. Most importantly, we did not have a “bubble” in our stock market as Diagram 1 attests.
Nor have we had anywhere near the widening of credit spreads in debt markets that has occurred in the United States (Diagram 2). Our business environment has not been without incident, as several prominent failures show, but with the exception of One.Tel, they have not been the result of a boom and bust in the share markets.