While insolvency rates have climbed over recent years, the RBA’s recent financial stability review determined that this wouldn’t pose significant risks to Australia’s financial system.
Last Thursday (2 October), the RBA’s October 2025 Financial Stability Review concluded that Australian households, businesses, and banks were well-placed to weather global shocks.
Financial stability risks stemming from the recent uptick in insolvencies were “contained” due to the fact that most insolvencies had involved small companies or those with little bank debt, the RBA found.
“While banks’ non-performing business loans have been edging higher over the past two years,…