They are also holding substantial short-term funds abroad. One of the reasons for this is that there is still a shortage of credit-worthy borrowers. It is easy for a bank to lend money. The challenge for a successful bank is to make sure the borrowers will be able to pay it back.
Graph 6  Following that episode, it took almost four years for credit growth to return to a relatively normal rate. The next phase of credit growth was driven by the household sector. This began in the mid 1990s. Up until then, Australian households had relatively little debt by international standards, with debt outstanding equal to about 50 per cent of household disposable income.