Directions (next ten questions) : Read the following passage carefully and help you locate them while answering some of the questions.

Banks in Australia have a certain upside-down quality to them. Their share prices broke free from the gravitational pull that dragged down their international rivals during the 2008 financial crisis. In recent years, they have soared as others have sagged. Now that big banks in other rich countries are regaining their poise, as is most of the global economy, it is the turn of Australia’s to slide. This topsy-turviness behavior may yet continue given its worsening outlook. Serving a buoyant domestic economy with none-too-fierce competition, Australia’s big four lenders-Commonwealth Banks National Australia Bank (NAB), ANZ and Westpac-used to delight shareholders with bumper dividends. But concerns over their balance-sheets and exposure to Australia’s frothy housing market have caused their shares to dip. Investors fear that the exceptional circumstances underpinning the vibrant returns of recent years are coming to an end. The commodity “super-cycle” that boosted both Australia and its banks has fizzled. Unemployment is creeping up. The biggest concern is the health of banks’ mortgage books. Home loans have been fabulously lucrative for Australian banks but this is changing. According to analysts, return on them top 50%, levels which would make even pre-crisis Wall Street bankers salivate. No wonder, then that domestic home loans now represent 40-60% of Australian banks’ assets, up from 15-30% in the early 1990s. Mortgages in New Zealand account for another 5-10% . A growing number of loans are going to property speculators or to a homeowners paying back only the interest on their loan. Recent stress test suggested that a property downturn would ravage banks. Regulators fret about the lack of diversification in banks, especially given their dependence on foreign money for funding. They want banks to curb growth in the riskiest mortgages and to finance them with more equity and less debt. A government inquiry into the Australian financial system called for banks to be better capitalized. Collectively, Australian banks may need as much as A$40 billion in fresh capital to meet regulators’ demands. The big four are still highly profitable and their returns will remain better than most despite all the new equity they will have to raise. After all, banks around the world are being forced to fund themselves with more equity. Aussie borrowers are less likely to default on mortgages than American ones, as lenders have a claim on all their assets, not just the property in question. But there are other concerns as well. Credit growth in Australia is slowing. Expansion into crowded Asian market seems difficult which leaves little scope for diversification. If they cannot make banks less dependent on mortgages, regulators will have to find other ways to make them safer.