RBA chief highlights benefits of putting cash in savings accounts
The governor of the Reserve Bank of Australia (RBA) has asserted that the cautious attitude towards household finances being seen across the country could stand Aussies in good stead if global financial conditions weaken.
Many people have been putting money into savings accounts rather than spending their spare funds, something that Glenn Stevens told the House of Representatives Standing Committee on Economics was causing problems for the nation's retail sector.
However, he observed that while shops and other firms may struggle to cope with the low consumer confidence levels, this behaviour may be a positive sign in the long term.
"Consumer 'caution', while making life hard for the retail sector, is also building resilience in household balance sheets," he stated.
The expert asserted that this trend towards putting cash in bank accounts rather than spending it could provide a "good starting point" if international financial conditions weaken.
Earlier this month, Treasury secretary Martin Parkinson told the University of Western Australia that the world's financial markets are likely to remain volatile in the next few years.
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