One sidebar to aftermath of the global financial crisis, and the "lower for longer" interest rate environment has been how well Australia's major banks have weathered a low growth environment. The further outlook, at time of flat returns and demand for yield, was the subject of a panel discussion by insto investment advisers at the Australian Financial Review Banking and Wealth Summit on Wednesday.Martin Lawrence, from proxy voting firm Ownership Matters, set the tone early on, saying that "one of the best management tools is humility, [therefore] one of the biggest risks to the Australian banking system is hubris." Lawrence noted that Australia's share market hadn't been given a serious test for maybe 20 years.Paul Taylor, country head of equities investments in Australia for global asset manager Fidelity International, added a few more shades of concern: "There's also a cyclical risk, where debts are ticking up a little, and structural risk - this is, disruption to the banks' business model from online digital players or payment systems."Then he relented by noting that the situation was a long way from danger."I would put non-performing loans' effect as below average risk. Similarly culture is one to watch, but not a concern," Taylor said.Scott Manning, lead Australian banking sector analyst for JP Morgan, was fresh from meeting Asian investors and said their primary focus was on how a slowdown in China would affect Australian banks; while his US hedge funds clients were already asking about the housing bubble.For Manning, the biggest risk to the Australian banking sector is from interest rates. He said some domestic banks were assessing debt affordability at 300 basis points above where we are today.Manning referred to an RBA paper published last week, nothing that "with record levels of household debt and record low interest rates, things can only go one way." Despite this, bank share price valuations do not factor in the cost of a recession, although they do cover a slowdown or flat earnings, said Taylor."Our position is a slight underweight - we are in a lower growth world - and growth is a rare asset; banks have no growth, and are being priced in for that."Taylor agreed that ROEs have definitely declined, and the ratios for 'corporate banks' (those with a greater proportion of business loans in their asset base than the industry average) will continue to decline further than returns from 'mortgage banks'."The new 18 [per cent ROE] is 14," he quipped.