Major banks would struggle to cope if borrowing levels recovered, the National Australia Bank has told a Senate inquiry.
NAB's chief financial officer Mark Joiner says Australia was still mired in the global financial crisis and would continue to be ''for some time''.
In this environment, he said NAB was ''finding it quite difficult'' to move away from safe-haven and fixed-income assets like bonds as financial market volatility continued.
Unstable sharemarkets were making investors ''fearful'' and encouraging them to put their superannuation into cash.
Wholesale money market volatility and strong competition for deposits among major banks meant these lenders may not have sufficient funds to provide business credit in the event of a borrowing recovery.
''It can be can solved by strengthening the ability to distribute [banking] assets to superannuation funds,'' he said.
Commonwealth Bank-owned subsidiary BankWest was under fire at the hearing for bringing in receivers to cheaply wind up a rural NSW hotel and property developments in NSW and Queensland that had appeared to be solvent. AAP