RBA's October 2025 Review Highlights Financial System Resilience

Key findings from the review include:

• Most households with mortgages are keeping up with repayments and have built savings buffers.
• Many businesses have established financial buffers.
• Australian banks continue to maintain high levels of capital and liquidity, positioning them to support the economy through potential disruptions.

Despite these positive indicators, the RBA identifies several external risks that could impact financial stability, such as high and rising government debt levels in major economies, stretched asset valuations and leverage in global markets, and heightened geopolitical and operational risks.

Domestically, the RBA notes that while the financial system is robust, vigilance is necessary to maintain this resilience. The report emphasizes the importance of prudent lending practices and the need for financial institutions to continue building their capital buffers to withstand potential shocks.

For individuals and businesses, the RBA's findings offer reassurance about the stability of Australia's financial system. However, it also serves as a reminder of the importance of maintaining healthy financial habits, such as building savings and managing debt responsibly, to navigate any future economic uncertainties.