The Commonwealth Bank has predicted the credit crisis will drag on for at least 12 months, amid signs the full impact of the crunch on bank balance sheets - and what banks will be willing to lend to borrowers - will not be felt until atleast next year.
CEO Ralph Norris says that lending rates are likely to increase in the coming financial year as uncertain debt markets put the global banking industry under pressure.
The risks to the banking sector are high, explaining why even a solid player like CBA has lost a third of its share value.
It is interesting to see how shares in Australian banks, which have reported record profits, have been sold off more heavily than their US counterparts that have reported huge losses.
This week saw CBA and its counterparts bounce back as investors feel there is value to be had from these beaten down banks.
TELECOM
A battered and bruised Telecom is finding some support among investors which has seen the share price lift off a low point.
Many believe Telecom has been a mismanaged monopoly with many of its major moves being badly thought out and poorly executed.
Instead of co-operating with the Government in a way that would see it accept change and welcome competitors, but maintain a powerful first-mover advantage, it fought change and infuriated the authorities.
Now Telecom has competition coming from all sides and is facing big challenges in changing technology.
One issue that puzzled investors and did nothing to improve their feelings towards Telecom was the announcement that Paul Reynolds, the recently arrived, formerly Britain-based chief executive of Telecom, has joined the board of directors of XConnect Global Networks in the UK.
