Skip to main content

Is a financial crisis looming?

The most likely consequence of the rapid build-up of household debt over the past decade is a number of years of softer GDP growth and lower interest rates than widely expected. But the risk of a more painful consequence, namely a recession or a financial crisis, has risen. There’s a danger that the Royal Commission investigation into the banks results in a slump in credit growth that causes house prices to fall sharply and the economy to weaken which, in turn, casts doubts over the quality of banks’ assets.

Become a client to read more

This is premium content that requires an active Capital Economics subscription to view.

Already have an account?

You may already have access to this premium content as part of a paid subscription.

Sign in to read the content in full or get details of how you can access it

Register for free

Sign up for a free account to gain:

  • Unlock additional content
  • Register for Capital Economics events
  • Receive email updates and economist-curated newsletters
  • Request a free trial of our services

Get access