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Australia banks would weather sovereign downgrade-RBA

Published 12/07/2016, 02:52 pm
Updated 12/07/2016, 03:00 pm
© Reuters.  Australia banks would weather sovereign downgrade-RBA

SYDNEY, July 12 (Reuters) - A possible downgrade to Australia's triple A credit rating was unlikely to have much impact on the nation's banks, a top official at the Reserve Bank of Australia (RBA) said on Tuesday.

The head of the RBA's financial stability unit, Luci Ellis, said evidence from other top-rated countries that had been downgraded showed the impact was usually modest, in part because markets would already have priced in the risk.

Last week, Standard and Poor's changed Australia's ratings outlook to negative and warned it could downgrade in six to 12 months should the outlook for the government's budget deficit not improve.

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