Australian banks would probably not to be affected by the European debt crisis, said a representative of a bank and life insurance regulation authority, adding that most institutions and organizations have had little exposure to trouble continental lenders.

Dr. John Laker, chairman of the Australian Prudential Regulation Authority (APRA), said the other day that the European debt crisis in Australia was likely to have a slight impact.

Dr Laker told the Senate Economics Committee in Canberra that Australian banks were not major participants in the region where the fragile economic recovery in Europe was threatened. "Australian banks have a very small exposure to countries in the euro area," Dr Laker said.

"Global funding markets, to date at least, have been much more discerning about the fundamental strength of our banks," said Dr. Laker.

He said that Australian banks were more reliant on domestic and Asian region economic growth. "These developments augur well for Australia's financial institutions," he said, noting that these areas were both strong.

"Over recent weeks, however, this positive global growth story has been obscured by the financial ash cloud over Europe," Dr. Laker said.

Australian banks have already organized most of their funding for this year to deter the impact of the large spreads caused by the Greek debt crisis.

The regulation authority is also monitoring the global and domestic equity market volatility on life insurance and superannuation companies.

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