We also have one of the highest levels of foreign ownership and, among privately owned systems, one of the most concentrated. By their nature, banks are exposed to risks which they seek to manage. It is by absorbing and managing those risks that banks contribute to our economic growth and prosperity. They transform short-term liquid deposits into long term, difficult to monitor assets.
Liquidity transformation and credit origination services have volatile expected future cash flows and changing discount rates. Bank capital is the buffer that enables a bank to meet its obligations to others even when its claims on others fail to materialise as expected. Bank management does not seek to break the bank but neither do motor vehicle drivers usually seek to have accidents.