Aussie market can weather Europe woes

by BN19 Dec 2011

Vow Financial CEO Tim Brown has said Australia is well positioned to weather European volatility.

While cost of funds "would increase dramatically" in the event of another 12 months of volatility next year, Brown said that the Australian banking system is in a "sound" position.

In a Christmas message to Vow brokers, Brown said that the US seemed to be through the worst of its downturn, with consumer confidence and retail spending improving.

"This bodes well for Australia and China as the US consume around 25% of the world’s GDP," he said.

Brown flagged continued downward pressure on interest rates in the coming year.

"Interest rates will continue to drop in Australia until consumer confidence turns around, which in turn will drive affordability and investment returns."

Brown added he was "reasonably confident" property would start to perform nex year.

Vow Financial will continue to promote diversification among its broker network in 2012,  according to Brown, with a focus on improving broker cross-selling techniques.