Australia's central bank on Thursday cautioned borrowers against taking on excessive debt when interest rates start to fall and risking a boom/bust cycle, though it judged the financial system remained resilient overall, Reuters reported. In its semi-annual Financial Stability Review, the Reserve Bank of Australia (RBA) again highlighted the resilience of households, businesses and banks in the face of decade-high interest rates and painful inflation.

While the ATO and major banks are still major drivers of insolvencies, insolvency firms are beginning to see more closures triggered by cash flow issues, the Accounting Times (Australia) reported. The latest credit risk data from Alares suggests that the rate of insolvencies had eased slightly in August despite insolvency numbers remaining 33 per cent above average. In its insights report, Alares said that this could suggest that the “insolvency catch-up” could finally begin to slow down. Alares said the ATO remains the dominant driver of the insolvency catch-up.