RBA April 2021 Financial Stability Review

Author: Eamonn Sheridan | Category: Central Banks

The Reserve Bank of Australia's Financial Stability Review is published twice a year

Link to the full text is here: Financial Stability Review

Headlines via Reuters:

  •  housing price growth being watched closely by regulators
  • important that banks do not take excessive risks in low rate environment
  • lending standards have not yet deteriorated, remain robust
  • rising prices an affordability challenge for low income households
  • Australian banks in strong financial position coming out of pandemic
  • banks have abundant liquidity and funding, adequate provisions for bad loans
  • most households in good position to service debt with low rates, large liquidity buffers
  • some households, firms face rising financial stress as govt support measures unwind
  • banks closely monitoring their exposure to office, retail property sectors
  • committed liquidity facility for banks may no longer be needed given rise in bond issuance
  • rising asset prices a channel through which accommodative monetary policy works
  • many asset prices are high globally, but still consistent with very low interest rates
  • cyber attacks growing risk for financial stability which banks need to guard against
  • increasingly likely that large financial institutions will be impacted by cyber attacks
  • banks, insurers need to act early to address financial risk from climate change
  • banks set to draw down most of TFF funds, face largest ever refinancing task in 2023/24

Nothing in that lot to indicate the RBA is concerned on stability for now. 

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