Financial crisis worst in a decade: RBA

The global credit squeeze is putting financial markets under greater strain today than at any time since the early 1990s, the Reserve Bank of Australian has declared.

In its Financial Stability Review released today, the RBA explores the issues behind the current credit crisis and its impact on the Australian financial sector.

And the verdict? Despite a significant rise in funding costs, most of which has been met by consumers, the Australian banking system remains in a “solid position”.

In a speech accompanying the release of the report this morning, RBA governor Glenn Stevens said Australia was “weathering the storm well”.

“There is very little direct exposure to the United States sub-prime problems, but the main reason for the resilience is many years of robust economic growth, sound regulatory foundations, and prudent risk management,” Steven says.

On the markets today, the broadly positive performance of the past few days has not continued this morning, with the S&P/ASX200 down 0.6% on yesterday’s close to 5348.8 at 12.45pm.

The fall follows the release of data overnight showing consumer confidence in the US has fallen to its lowest level in more than 30 years.

And the number of job vacancies increased in the three months to February, up around 1.3% for the period to just over 180,000.