Banks face a correction: Murray

David Murray says the Australian banking system needs to be strengthened before asset prices correct in the wake of global monetary stimulus programs.

The Australian Financial Review quotes a speech from Mr Murray yesterday where he adds to concerns from Reserve Bank of Australia Governor Glenn Stevens about the complacency of the local market.

“That is going to cause a correction at some point, which will put more ­political pressure on financial systems,” said Mr Murray, who is chairing the federal government’s inquiry in the financial system.

Concerns from some corners of the Australian economy about the banks have been rising as the combined market value of the big lenders have eclipsed $400 billion.