The stickiness of the level of impaired assets at banks receives close attention in the half-yearly Financial Stability Review published by the Reserve Bank of Australia."It is notable that quarterly inflows of newly impaired assets have been relatively constant over the past two years, at a much higher level than prior to the crisis," the RBA wrote.The level of impaired assets has been broadly stable at A$30 billion for the last year, down from a post-crisis peak of $32 billion in mid-2010. The ratio of impaired assets, at 1.07 per cent, is down from a peak of 1.25 per cent in March 2010.The RBA noted that "during 2011 the rate at which loans were moving out of impairment due to write-offs or 'curing' was similar to the inflows of newly impaired assets, resulting in little change in the level of impaired assets. "The apparent stickiness in banks' impaired assets over the past few years could reflect a number of factors, including the pressures some business borrowers are facing from the high exchange rate and subdued domestic retail spending, and [a] recent weakness in house prices making it harder for mortgage borrowers in difficulty to refinance. "Were impaired assets to stay at their current level, it would mean that, if economic conditions deteriorated, banks' asset performance would be starting from a weaker position than before the crisis."The RBA said both the major banks and smaller Australian-owned banks were behind the improvement in the sector's improved asset quality over the second half of 2011.The share of non-performing assets on foreign banks' books increased, "although this was largely attributable to one foreign banking group", the RBA said, taking care not to name Lloyds Banking Group for garnering this distinction.