Speaking at last week’s Australian Grains Industry Conference (AGIC), Mr Fahour said a strong banking sector means Australia is in a relatively strong position.

But he warned there would be more pain to come, with the financial sector holding the potential for ‘more unpleasant surprises’ over the coming 18 months.

“I don’t think we’ll see the bottom until at least late 2009 or possibly even early 2010 – things will be tight on the global credit front until then.”

He said Australia would feel the cold breeze from the fallout from the US housing crisis, which has moved from the sub-prime credit sector into the prime arena but that he did not believe it would be as severe here.

“We’re not immune to the higher cost of credit, but the banks are strong, cost efficient and appropriately well regulated here.”

Mr Fahour used the opportunity to push for the chance to consolidate Australia’s major banks.

“I know the government is happy with its ‘four pillars’ system, but I believe we need consolidation so we can form banks that can compete on a global scale,” he said.

“It would help greatly in protecting Australia from being vulnerable from what happens in the rest of the world.”

Mr Fahour also expressed his belief that there needs to be a change in the regulations governing term deposits.

They need to be more attractive to people.

Then term deposits would allow banks greater access to equity and so would reduce the banking sector’s reliance on wholesale funding.

“I want the same tax treatment for savings as there are for share investments and property - capital gains relief if you have them for more than a year.

“What's the difference between a term deposit of one year or more versus a property investment, versus a share market investment, versus a superannuation fund?" Mr Fahour asked.

“Superannuation is killing term deposits as an investment of choice for Australians.

"In recent years, it has grown by 10 times compared with the growth in term deposits, up by four times."

Meanwhile, he predicted good times for the Australian grains industry, saying the strong commodity price would outweigh the increase in input costs.

He said he foresaw a range of opportunities opening up for the industry, such as in key markets in the Middle East.