The Reserve Bank of Australia is taking a phlegmatic view of the consequences of the global liquidity crunch on Australia's banking system.In the half yearly Financial Stability Review, published yesterday, the RBA emphasises the very strong profitability and sound capital base of Australia's banks, and the banks' continuing access to wholesale capital markets for funding.What the RBA do not buy into in the review is the current debate over credit rationing, or the adequacy of bank capital to support the reintermediation of credit provision (given that bank lending increased at an annual rate of 22 per cent over the last six months) and it does not take a view on the likely trajectory of bad debt experience over the next year or so.In a complementary speech on these themes to a Euromoney conference in Sydney yesterday RBA governor Glenn Stevens did address these themes in the context of international banks.This, he said, "is, in fact, a key element of the whole situation: more capital needed to be carried by the big international banks to support the risks they were taking, and that capital has to be found now."Stevens noted that international banks curtailed share repurchases, reduced dividends and sold new shares, sometimes in the face of having reported significant losses."With this being the case, they have also, at least so far, been able to step in to fill the gap in corporate funding," Stevens said.