One significant focus of the review is the role of non-bank lenders in the Australian economy. These entities, which do not accept deposits, have been expanding their market share in housing and business lending. Despite this growth, the RBA notes that their overall systemic importance remains limited due to their relatively small size, accounting for approximately 6% of financial system assets. The report emphasizes the need for continuous monitoring to ensure that lending standards remain robust and do not pose risks to financial stability.
Operational resilience is another critical area addressed in the review. The Australian Prudential Regulation Authority (APRA) has introduced a new prudential standard, CPS 230, set to take effect in July 2025. This standard aims to strengthen the operational risk management frameworks of APRA-regulated entities, ensuring they can withstand and recover from disruptions, including those arising from third-party service providers. The RBA highlights the importance of these measures in maintaining the stability and trustworthiness of the financial system.
For individuals and businesses seeking financing, these developments are particularly relevant. The growth of non-bank lenders offers additional avenues for obtaining credit, potentially providing more flexible and tailored loan products. However, borrowers should remain cautious and ensure they engage with reputable lenders who adhere to stringent lending standards. The introduction of CPS 230 signifies a commitment to safeguarding the interests of borrowers by enhancing the resilience of financial institutions.
In conclusion, the RBA's October 2025 Financial Stability Review paints a picture of a robust Australian financial system, capable of navigating global economic challenges. The emphasis on monitoring non-bank lending and enhancing operational resilience reflects a proactive approach to maintaining financial stability. Borrowers are encouraged to stay informed about these developments, as they have direct implications for access to credit and the overall health of the financial sector.
