Amidst the stress weighing down on the present global financial situation, specifically in Europe, Australian banks are robust enough to ride out any new fiscal storms, according to the Reserve Bank of Australia (RBA).

In an address before the 24th Annual Finance & Treasury Association Congress held in Sydney on Wednesday, RBA assistant governor Guy Debelle has expressed confidence that Aussie banks are in far better shape as compared to their European counterparts.

"The Australian banks' funding structures are considerably more resilient to periods of stressed markets than they were previously, given the changes that have occurred over recent years," Debelle was reported by the Australian Associated Press (AAP) as saying during his speech.

While the RBA has maintained a steady deposit of $1.25 billion over the past 18 months, Debelle pointed out that the European Central Bank (ECB) has been mostly compelled to extend significant assistance to banking institutions spread across Europe, in many instances in almost unlimited form loans.

The domestic situation is virtually in reverse, Debelle said, wherein "we see little sign of strain or counterparty concern in the local interbank market."

As the Eurozone is wracked by debt and financial struggles, a number of Euro governments absorb the pinch, which in turn infects their banking environment, the RBA head for financial market said.

"The cost of funding for European banks generally has risen, while many banks in the European periphery countries have all but been locked out of funding markets ... and cost for banks to borrow euros from each other has risen sharply since significant concerns re-emerged about Greece in May this year." Debelle revealed.

To cope with the problem, the ECB has been forced to pour down funding in which "banks can source unlimited euros from the ECB at fixed interest rates for periods of at least one year ... and provided they hold the appropriate collateral."

Thankfully, the Australian situation is more stable, according to Debelle, adding that banking activities got another boost last week when the Parliament approved a new that allows local banks to issue covered bonds.

"As a result, one might expect to see some covered bond issuance by local banks in the near future, given the apparent preference of global investors for this product in the current environment," Debelle stressed.

Over the long-haul, the RBA official is optimistic that Australian banks are well-positioned to deal with future financial issues considering the emerging local trend in which "deposits growth has outstripped credit growth for more than two years now, thereby reducing the banks' need to access wholesale debt markets."

"Banks have increased their use of longer-term funding," Debelle added, which he noted was a direct result of a much stable local banking environment that immediately followed the easing down of the global financial crisis in 2009.