Fitch write "banks in several 'AAA' rated...>

RATINGS: Fitch write "banks in several 'AAA' rated countries face rising risk

from the household sector amid a build-up of financial imbalances, Fitch Ratings

says in a new report. In Australia, Canada, Norway and Sweden, high household

debt amid slowing housing markets represent a growing risk to banks in those

countries, which are among the world's most exposed to residential mortgage

lending. The major banks also have, to varying degrees, a reliance on wholesale

funding, which can increase their vulnerabilities during a market stress. Fitch

expects modest home-price falls to continue in these countries' major cities

over the next two years due to tighter credit standards and regulations,

declining consumer confidence and the possibility of higher interest rates. As

benign macroeconomic conditions recede, banks may face higher credit losses,

particularly if unemployment increases. However, we expect major banks to

maintain their risk discipline. Proactive policy-setting in the form of targeted

macro-prudential policies and increasing supervisory scrutiny have reduced

vulnerabilities and mitigate rising macro risks. Increased capital requirements

have improved major banks' resilience to macroeconomic risks."