Australia banks' capital buffers expected to fall over coming year

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The strong balance sheets of the country’s banks allowed them to play a role “as a shock absorber for the economy,” Wayne Byres, chairman of the Australian Prudential (NYSE:PUK) Regulatory Authority said on Thursday.

“That capital has been built up precisely so that banks are able, in times of stress, to absorb losses and sustain the flow of credit to the broader economy,” Byres said in his opening remarks in a webinar.

“Now is the time to allow that to happen. It means capital ratios will come down over the year ahead: that should surprise no one.”