Impact of Global Financial Crisis

The effect of the orbicular financial crisis on Australia has been considerably less, compared to the an other(prenominal) affected countries. The Australian economy has revealed meliorate outcomes than most other developed economies, which experience recessions and rises in unemployment. Also the Australia banks relieve oneself managed to be profitable without requiring any capital snapshot from the Government.The noticeable collision of the financial crisis on most Australian households was the life-sized dip in equity prices, which reduced the wealth of Australian households by nearly 10% by March 2009. However, since the trough In equity market places In March 2009, the local anesthetic market had recovered half of Its defy by the end of November 2009. The Australian one dollar bill sign also depreciated rapidly and sizeably as the crisis intensified, declining by over 30 per cent from its July 2008 peak.Around the m of the Lehman ankruptcy, conditions in the forei gn exchange market were particularly illiquid, prompting the Reserve trust of Australia (RBA) to Intervene In the market to leaven liquidity. Since March 2009, as fears abated, the Australian dollar largely recovered, reflecting the relative strength of the Australian economy. The credit and money markets in Australia have also proven to be to a greater extent resilient than in many other countries, necessitating considerably less intervention by the RBA than occurred in many other countries.In large part this reflected the wellness of the Australian banking system. The Australian banks had almost no holdings of the toxic securities that seriously affected other global banks. The health of the Australian banking system facilitated the effectiveness of the financial and fiscal response, particularly by allowing oftentimes of the large easing in monetary policy to be passed through to refer rates on loans to households and businesses, in unappeasable contrast to the outcome in other developed economies.