> banks in Australia are massively overexposed to residential mortgages and small business loans underpinned by residential property As opposed to what, though

> banks in Australia are massively overexposed to residential mortgages and small business loans underpinned by residential property As opposed to what, though? Historically housing and small business loans were the raison d'etre for being a bank. It is only the last few decades where they have been allowed to invest in other areas. I think you are overplaying the exposure to housing. Our tier capital requirements were and are much more onerous than in the U.S. We (our central bank and treasury) have been telling the U.S. for two decades that their banking system was broken, and we were proven right. You can't compare a U.S. bank to an Australian one, they are very different beasts.