{"id":41560,"date":"2018-12-12T15:11:00","date_gmt":"2018-12-12T20:11:00","guid":{"rendered":"https:\/\/olduvai.ca\/?p=41560"},"modified":"2019-01-31T22:05:51","modified_gmt":"2019-02-01T03:05:51","slug":"severe-collapse-of-home-prices-might-trigger-a-financial-institution-crisis-in-australia-oecd-frets-about-the-bank","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=41560","title":{"rendered":"\u201cSevere Collapse\u201d of Home Prices Might Trigger a \u201cFinancial-Institution Crisis\u201d in Australia: OECD Frets about the Bank"},"content":{"rendered":"
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\u201cSevere Collapse\u201d of Home Prices Might Trigger a \u201cFinancial-Institution Crisis\u201d in Australia: OECD Frets about the Bank<\/a><\/h3>\n<\/header>\n
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\u201cThe authorities should prepare contingency plans.\u201d The big four banks are too exposed to mortgages. Even if the banks don\u2019t topple, the economy will get hit hard.<\/strong><\/p>\n

In its latest report on Australia, the OECD focuses to a disturbing extend on housing, household debt, what the current housing downturn might do to the otherwise healthy economy, and what the risks are that this housing downturn will lead to a financial crisis for the big four Australian banks, an eventuality that it says \u201cauthorities\u201d should make \u201ccontingency plans\u201d for.<\/p>\n

The big four banks are huge in relation to the Australian stock market and the overall economy: Their combined market capitalization, at A$341 billion, even after today\u2019s sell-off following the OECD report \u2013 accounts for 26% of Australia\u2019s total stock market capitalization.<\/p>\n

How they dominate the stock market showed up on Monday after the release of the report:<\/p>\n