A senior Reserve Bank official says housing markets are not the biggest threat to financial stability, despite the economic turmoil unleashed by property busts in the United States and elsewhere.

In the years since the global financial crisis, global debate has continued to swirl about which economies could be vulnerable to a housing slump.

Australia's property market has often been singled out by overseas commentators, with The Eco-nomist saying in August that houses here were more than 30 per cent overvalued when compared with rents and incomes.

But the head of the Reserve's financial stability department, Luci Ellis, today said it would be a "mistake" to assume the main risk to the health of a financial system came from housing markets.

"Let me be clear: risks from housing markets are not zero, and never will be. But commercial real estate or property developers are still more likely to pose risks to a financial system, and through it to the real economy," Dr Ellis said, in comments that were not confined to Australia.

Throughout the history of booms and busts, Dr Ellis said commercial property markets were more likely to threaten financial stability than residential property or the sharemarket.

Despite the intense focus on Australia's housing market, commercial property has tended to be the biggest source of bad loans for banks.

The nation's banks were holding about $8 billion in impaired loans in the sector in the June quarter, the Reserve's latest Financial Stability Review found.

Dr Ellis made the remarks in a speech arguing that when looking for lessons from the global financial crisis, it was important not to come to "mistaken conclusions". Aside from her remarks on housing markets, Dr Ellis also argued against using simplistic metrics to gauge the health of a banking system.

For instance, she said it was "misleading" to focus too much on loan-to-deposit ratios – which are relatively high for Australian banks, at more than 120 per cent.

"If you see a bank with a very low level of this ratio, well below 100 per cent, ask yourself what the bank is doing with that deposit funding instead," Dr Ellis said. "They are investing it in securities and other kinds of investment. And as we saw in the crisis, those securities can often be far riskier than regular lending."

With banks being forced to hold more top-tier capital under new global rules to make the sector more resilient, Dr Ellis also said regulators could not afford to assume highly capitalised banks would necessarily be safer.