Wednesday, December 1, 2010

Fitch: Australian Banks Can Handle 30% Decline

Australia Banks Can Manage Housing Drop, Fitch Says
The three scenarios Fitch tested are mild stress, with mortgage defaults of 2.5 percent and a 20 percent drop in home prices; medium stress with 6 percent defaults and 30 percent decline in prices; and severe stress with 8 percent defaults and a 40 percent price slump.
The final results will be released before Christmas, Fitch spokeswoman Iselle Gonzales said.

Stress tests have lost their market luster in the wake of Ireland's meaning nothing.

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