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Bank lending practice and its implication for the Australian Financial System.

Bank lending practice and its implication for the Australian Financial System.

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The Australian financial system has an overall strong asset performance. Its policy on lending to businesses is also very sttong so the amount of money in bad and doubtful debts are less and so are the losses incurred from business lending. The lending rules and policies are effective and they have been useful for the economy. However, the only negative aspect is the fact that the Australian Financial System does not lend much for housing finance. The effect of this is that people are unable to get financial assistance from the banks and the prices of the houses are high. So, many people are unable to afford buying the house. Thus, teh Australian Financial System should ensure that they develop a sound financial policy regarding house lending. This shouls be framed such that the customers can buy the house as well as the banks are protected from the excessive risk involved.

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