Since the beginning of the crisis, the banks’ cost-to-income ratio has deteriorated in the majority of countries. In many cases this has reflected the reduction in revenues per unit of assets, while the cost-to-asset ratio has often improved. In Spain there has been a major effort in streamlining branch networks; the number of branches has dropped by almost 40 per cent since 2008.
It is usually the case, however, that the most important impacts on Australia from these sorts of events are not the direct export effects but those that come through the broader global channels – the impact on world and Asian growth, on resource prices and on the cost and availability of global capital.