AUSTRALIAN BANKS

There are four main reasons why Australia’s major banks continue to perform strongly amid the growing financial crisis.

The first is that Australian banks haven't engaged in anything like the extent of imprudent mortgage lending as their counterparts in the United States and some European countries. “Sub-prime” mortgages represent less than 1 per cent of all Australian mortgages (compared with over 15 per cent in the United States), and most of the subprime mortgages that have been written in Australia have been originated by non-traditional lenders, not by the banks. And banks have generally avoided writing mortgages at extremely high loan-to-valuation ratios.

The greater prudence of…