Financial Stability Review – March 2026

In Brief

The Financial Stability Review provides the RBA's assessment of the current resilience of the financial system and potential risks to financial stability. It is issued half-yearly.

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Australia’s financial system is well placed to handle a challenging and uncertain global environment, but it remains important to be prepared for potential shocks.

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Global environment

Risks to the global financial system have increased.

Escalation of conflict in the Middle East has sparked sharp movements in global financial markets.
Risk of disruptions from operational, cyber and security incidents is heightened.

Maintaining resilience

In this uncertain environment, banks and other financial institutions need to maintain focus on their resilience.

Financial institutions should continue to build resilience and be ready to respond to liquidity, operational and geopolitical risks.
Financial institutions should maintain prudent lending standards.

Households

Most households with mortgages are in a solid financial position, though some will face growing challenges.

Most households with mortgages are in a solid financial position, although some continue to experience budget pressures.
While cost pressures are expected to increase, many households have built up financial buffers and maintain solid cash flow positions.

Businesses

While conditions are still challenging for some industries, most businesses remain resilient.

The share of companies entering insolvency has levelled out around long‑term averages, but is higher in some industries.
Most firms are expected to manage increases in interest expenses and input costs.

Banks

Australian banks are in good shape.

Australian banks are in a strong position to continue supporting the economy, even if conditions deteriorate sharply.
While competition in lending has been strong, lending standards have generally remained sound.

Non-banks

Risks posed by non‑bank financial institutions in Australia remain contained.

Non‑bank lending has been expanding quickly, but this growth has not created significant system‑wide risks.
Superannuation funds should continue to strengthen their risk management practices as the sector grows and its role in supporting Australians in retirement becomes larger.