The Atlantic reports that the total market cap of Australia's banks is now higher than the market cap of the Eurozone's banks. Yes, all of them.
It turns out that depressions aren't so good for banks.
A big chunk of this shouldn't surprise us. European banks loaded up on subprime debt. Australian banks didn't. European banks made their own bad real estate loans. Australian banks didn't. And European banks are sitting on top of piles of dodgy sovereign debt. Australian banks aren't.
But this doesn't really make sense. It explains why Europe's financial sector fell much more in 2008 than Australia's financial sector did, but it doesn't explain why Europe's has kept falling and Australia's hasn't. The answer, as always, is that it's about the economy.