The Australian sharemarket is bracing for more trauma today after the spectacular unravelling of Melbourne stockbroking firm Opes Prime.

Until late last week, Opes was a billion-dollar company, boasting a big name client list including banks, asset managers, stockbrokers and around 1,200 "mum and dad" retail investors.

The strategy was to use Opes to buy shares through substantial margin loans - a common strategy in a bull market but extremely dangerous in these current bearish times.

While the extent of the Opes losses and what is ultimately left in the carve-up remains unclear, the firm's banking clients will get priority in the carving up of the spoils.

It is believed ANZ is owed $650 million and Merrill Lynch about $400 million. Both are understood to have ordered the sale of shares to cover their exposure.

As a result, individual retail clients will most likely see their shares sold without profit so the banks can be repaid.

And the news could get worse, with a big risk that superannuation funds are potentially exposed.

The collapse of Opes Prime is expected to fuel a new level of fear and suspicion that other companies in the risky business of margin lending could already be in troubled waters.

There are also concerns that some superannuation funds that lent stock to Opes Prime for margin loan investing could be exposed.

These funds would stand behind the banks in the queue of creditors, which increases the chance of losses for some retirees.

Opes Prime's receivers and administrators - Deloitte and Ferrier Hodgson - have been scouring computer hard drives and hardcopy archives to determine what went wrong, how deep the "financial irregularities" really are, and whether the law might have been broken.

Investigators are keen to interview Opes Prime's chief executive Laurie Emini.

The corporate regulator ASIC obtained orders on Friday to obtain his passport and to prevent him from leaving the country.

The first creditors meeting is scheduled for April 8 and investigators are racing to provide fresh information to some very concerned creditors - not just the banks, but the last in line retail investors who stand to lose a whole lot more than their portfolios.

Meanwhile the market regulator, the Australian Securities Exchange, will be asking when Opes directors first learned of the bad news and at what point did the company become insolvent.

The Opes collapse has been driven in part by the changing economic times and the global credit crunch brought on by the subprime mortgage crisis in the United States.

The new developments make this week's other economic news more relevant than ever, especially after last week's Financial Stability Review from the Reserve Bank provided a clean bill of health.

The key event is the RBA's April meeting on Tuesday where interest rates are almost certain to be kept on hold given the recent independent action by the major banks.

The statement that comes with the decision though, could provide an insight on whether inflation is moderating enough for rates to stay where they are for the medium term.

And on Friday the RBA governor Glenn Stevens will face a House of Representative economics committee, where he's certain to be quizzed on his "that's life" comment last week about the cost of credit and the independent rises by the big banks.

Other data to be scrutinised this week includes the latest inflation gauge from TD Securities and the Melbourne Institute and fresh retail trade data from the ABS which is expected to remain sluggish.

Despite last week's renewed optimism, the share market is expected to remain in roller coaster mode, and the pain for banking stocks will most likely continue.