Worried households stick with cash
HOUSEHOLDS and businesses continued to divert funds into bank accounts as worries about the outlook for the global economy intensified during September.
The increase in deposits coincided with wild swings in equities as fractures in Europe deepened, although the pace of growth slowed from August.
Figures released by the Australian Prudential Regulation Authority showed $12.3 billion in deposits were pumped into the banking system during September, with most of the increase coming from households. The latest increase came on the back of $27 billion being put into the system during August.
Fast-paced growth in deposits over the past two years has been a boon for banks because it reduces their reliance on global money markets.
The banking system saw a 0.9 per cent increase in deposits to $1.43 trillion, the APRA figures show. This outpaced lending growth of just 0.6 per cent during the month.