The flow-on effects of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry into the real economy have dampened banks' risk appetites. However, the effects of a slowdown in housing lending, which has also dampened other areas of lending such as commercial property  loans, is likely to be benign in the longer term, according to ratings agency Standard and Poor's.At a briefing earlier this week Sharad Jain, director financial institutions at S&P, noted that while non-bank lending had grown sharply in the last couple of years it is still is a relatively small part (less than five per cent) of the overall system.He said a controlled slowdown increased the chances that there would be no impact on the ratings of Australia's major banks."Paradoxically, the risk build-up has been slow and therefore should be benign, in that there will be an orderly unwinding of risk," Jain said. "On the positive side the imbalances between the rate of growth of private debt and house prices themselves are coming down quietly, which means as the economy grows property prices are no longer overvalued, and therefore the risk of a sharp correction is lessened," he said."That hasn't yet happened in our opinion, but we expect it to occur."Australia's major banks each have an AA- rating with a negative outlook from S&P, compared to each of the banks' A- standalone ratings. This implied a reasonable level of federal government support for the sector, should it be required.Whether this attitude changes will depend on whether or not there is some dilution of support from the government - already under pressure to follow the Financial Stability Board's line and introduce bail-in rules for bondholders, or some other regulatory change to reduce the risk taxpayers have taken in past banking crises."APRA have said publicly that they are going to be in consult [with the financial services sector, government and other interested parties] by the end of this year on TLAC. What APRA and the government to do about it is just another step," Jain said."Once the consultation paper comes out - hypothetically in the next two or three months - then consultation will go on for the next three to six months."