Australian banks take China punt

Although the bursting of China's credit boom would have serious consequences for investors in resource stocks, shareholders in Australia’s biggest banks have plenty to be concerned about, too. Conventional wisdom holds that local banks mainly have an indirect exposure to China. The rupturing of the Chinese credit bubble would devastate the Australian mining sector, causing unemployment to rise and likely leading to an increase in home loan defaults while also potentially leading to falling house prices. But Australian banks are now increasing their direct exposure to the country at a very rapid rate - the fastest in the world in...

Although the bursting of China's credit boom would have serious consequences for investors in resource stocks, shareholders in Australia’s biggest banks have plenty to be concerned about, too.

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