Australia's benign interest rate environment will persist, providing conditions that are mostly favourable for banks.After its monthly board meeting yesterday, the Reserve Bank of Australia said that, in its judgement, "monetary policy is appropriately configured to foster sustainable growth in demand and inflation outcomes consistent with the target. On present indications, the most prudent course is likely to be a period of stability in interest rates." What the RBA should have said, but didn't, is that banking policy is appropriately configured to foster sustainable growth in profit outcomes consistent with the target. The RBA did say, again, that "financial conditions overall remain very accommodative. Long-term interest rates have fallen further and risk spreads remain low."Monetary policy "remains accommodative," it said. "Interest rates are very low and for some borrowers have edged lower over recent months. Savers continue to look for higher returns in response to low rates on safe instruments. Credit growth has picked up a little."If anything, rates will have to fall to address weak confidence, which hopefully is more a passing phase than a three year long electoral cycle event, once again.If banks lag in profit and run into trouble, it won't be the fault of the macro environment, but rather all their own work.