International Activities of Australian Banks

The Australian banking system plays a significant role in intermediating funds from foreign savers to Australian borrowers. Consistent with this, most of the banks’ international liabilities are related to their funding activities in offshore markets. After increasing strongly over the decade prior to the global financial crisis, the outstanding value of these liabilities has been little changed as banks have responded to a more difficult offshore funding environment. By contrast, the international assets of the Australian banking system are relatively small, with a sizeable share of these assets in a few countries where Australian-owned banks operate their main offshore subsidiaries and branches.