Commodity slump no pain for banks

Recent sharp falls in commodity prices are more annoying than worrying for supervisors of loans to resource companies.

The falls "will make it difficult for some resource-related companies to service their debt, [but] the risks posed to the domestic financial system from these developments seem limited," the Reserve Bank of Australia said in its periodic Financial Stability Review.

"The financial positions of the largest resource companies are robust, and the exposures of banks to the sector are not large."

More generally the RBA said: "other parts of the business sector appear to present little near-term risk to financial stability.

"Gearing levels are low by historical standards, and indicators of financial stress have continued to decline."