Background: Australian Banks have always pride itself on its strong lending standard that lead to an asset book comprising of high quality housing loans. Many people have suggested that high bank lending standard and the resultant high quality loans is one of the main reasons that the Australian economy was able to withstand the worst effects of the global financial crisis. However recent media articles and the evidence from the Royal Commission into the Banking and Financial services sector have casted doubts on whether banks and other lenders have applied those standards in approving loans to their customers

Unclear on how the above information is relevant to Bank lending standards in Australia in relation to the effect on the Australian Financial System