This paper presents a brief overview of developments currently taking place in the Australian banking sector relating to the measurement and management of credit risk. Section I provides, as background, a sketch of the structure of banking in Australia. Section II considers some of the forces operating within the Australian banking and financial system to increase the significance of credit and capital management in banks. Section III outlines some of the credit risk management practices being adopted in the major Australian banks. Section IV looks at the implications of these developments and speculates on the scope for greater use of banks' internal credit risk models, or other possible approaches, for capital adequacy purposes. A summary and brief conclusion are in Section V.Brian Gray is chief manager, Bank Supervision Department, Reserve Bank of Australia.
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations鈥揷itations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.