Source: Northern Territory Police and Fire Services
Police have now charged a 27-year-old male in relation to the suspicious death of his female partner that occurred in Borroloola on Saturday 6 December 2025.
He has been charged with murder and remanded to appear in Darwin Local Court 19 December 2025.
Police continue to urge anyone with information about the incident to make contact on 131 444 quoting reference number P25329866. Anonymous reports can be made through Crime stoppers on 1800 333 000 or via https://crimestoppersnt.com.au/.
If you or someone you know are experiencing difficulties due to domestic violence, support services are available, including, but not limited to, 1800RESPECT (1800737732) or Lifeline 131 114.
Source: Australian Mines and Metals Association – AMMA
The Australian Resources & Energy Employer Association (AREEA) today announced the retirement of long-serving Board Director Johnpaul Dimech and the appointment of Keith Weston, Managing Director of Sodexo Australia, as Sodexo’s new representative on the AREEA Board.
Mr Dimech – who is Sodexo’s Zone President Asia Pacific, Middle East and Africa (APMEA), Brazil and Latin America – steps down after 15 years of distinguished service, having served as an AREEA Board member from 2010 to 2025.
Throughout his tenure, Mr Dimech has been a strong advocate for employment outcomes and opportunities in the resources services sector, bringing deep operational, commercial and global leadership experience to the national employer group.
Mr Dimech was also a key supporter of several important workforce initiatives launched by AREEA during his time on the Board, including the Australian Women in Resources Alliance (2011), the Bright Future STEM Primary School Program (2018), and a range of mental health and wellbeing initiatives, an area of long-standing personal commitment for Mr Dimech.
AREEA Chief Executive Steve Knott AM paid tribute to Mr Dimech’s outstanding contribution to the organisation and its members.
“Johnpaul’s service to AREEA over the past 15 years has been exceptional,” Mr Knott said.
“He joined the Board at a time of significant change in workplace relations and went on to provide leadership and guidance across five terms of Australian Parliament, helping steer AREEA’s advocacy through successive waves of industrial relations reform, skills shortages and workforce challenges.
“Johnpaul has been a tireless and thoughtful voice for the resources services sector, ensuring the perspectives of contractors and service providers were front and centre in AREEA’s policy positions and engagement with government.
“On behalf of the Board, members and management, I sincerely thank Johnpaul for his commitment, judgement and contribution to AREEA’s work over a decade and a half.”
Mr Knott said the Board was pleased to welcome Keith Weston as Sodexo’s new representative.
“Keith is an accomplished leader with more than 30 years’ experience across remote sites, offshore and on-site operations, and global sales and business development,” he said.
“As Managing Director of Sodexo Australia, Keith brings deep expertise in the delivery of essential services to the resources and energy sector, along with a strong focus on safety, workforce capability and organisational culture.
“Like Johnpaul, Keith also has a deep personal commitment to psychological safety and psychosocial hazard risk reduction in the workplace.
“His experience leading complex operations and major growth initiatives will be a valuable addition to the AREEA Board as we continue to advocate for practical, balanced workplace relations settings and a sustainable workforce for our industry.”
About AREEA’s Board
AREEA is the largest and most diverse national employer group for the Australian resources and energy industry.
Its members include employers in hard rock and critical minerals mining, oil and gas, coal, smelting, refining, transport, logistics, engineering and all other supply and servicing sectors.
As of 16 December 2025, the AREEA Board comprises:
Julie Fallon (AREEA President), Executive Vice President Technical and Energy Development, Woodside Energy Limited
Tom Quinn (AREEA Vice President), Non-Executive Director, pitt&sherry and Vast
Jo Taylor (AREEA Vice President), Managing Director, Compass Group Australia
André Labuschagne, Executive Chairman, Aeris Resources
Mark Norwell, Managing Director & CEO, Perenti
Bill Townsend, Senior Vice President Corporate, INPEX
Source: Australian Ministers for Regional Development
The ACCC has commenced separate proceedings in the Federal Court against home meal delivery providers Grocery Delivery E-Services Australia Pty Ltd (trading as HelloFresh) and Youfoodz Pty Ltd for allegedly misleading consumers over subscriptions.
The ACCC alleges that HelloFresh and Youfoodz, which are both owned by HelloFresh SE, breached the Australian Consumer Law by advertising on their websites and apps that new customers could easily cancel subscriptions through their online account settings as long as they did so before a specified cut-off time. In fact, when many consumers tried to cancel their subscription online prior to the first delivery cut-off time, they were still charged for and received the first order.
Despite being able to sign up easily through the websites and apps, consumers were only able to cancel the first delivery if they spoke with a customer service representative.
HelloFresh allegedly carried out this conduct between 1 January 2023 and 14 March 2025, and Youfoodz between 1 October 2022 and 22 November 2024. During these periods, 62,061 HelloFresh customers and 39,408 Youfoodz customers were charged a fee despite cancelling their subscription online before the specified cut-off time for the first order.
“We’ve brought these two cases because we allege that HelloFresh’s and Youfoodz’s conduct involved a suite of confusing and unclear subscription practices in breach Australia’s consumer laws,” ACCC Commissioner Luke Woodward said.
“Despite what HelloFresh and Youfoodz represented to new Australian subscribers, tens of thousands of consumers were charged for their first order, even though they cancelled their subscription online before the cut-off date.”
The ACCC also alleges that HelloFresh required consumers to provide payment details to view and select meals from the full menu but represented to them in the sign-up process that they would not be charged unless they selected meals from the menu. In fact, when consumers clicked the button to progress to the meal selection screens, they were entered into an ongoing subscription and charged for the first delivery.
Many HelloFresh consumers were not even aware that they had been signed up to an ongoing subscription until they received a delivery or payment notification.
The ACCC also alleges that Youfoodz communicated to consumers who had taken steps to cancel their subscription in their online account settings that the first delivery was cancelled and they would not be charged, when in fact the first delivery could not be cancelled this way and they were still charged.
“In the case of HelloFresh, many consumers had not even selected meals but were unknowingly subscribed and charged regardless,” Mr Woodward said.
“Traders must clearly communicate when consumers are signing up for a subscription, as well as how they are able to cancel and avoid being charged.”
“Businesses using confusing and complicated subscription cancellation policies is a matter of significant public concern and, where there is evidence of breaches of the Australian Consumer Law and consumer harm, the ACCC will take enforcement action when appropriate,” Mr Woodward said.
“We are also urging consumers who are purchasing gifts this festive season to carefully review the contract terms before paying for any subscriptions.”
Consumer and fair trading issues in the digital economy and in the supermarket and retail sectors are among the ACCC’s current 2025-26 Enforcement Priorities.
The ACCC is seeking compensation orders for affected consumers, penalties, declarations, publication orders, the implementation of a compliance program and costs.
Individual consumer experiences
In one example, a consumer accessed the HelloFresh website on their phone and entered their payment details to view the menu, but after viewing it, decided not to proceed with a subscription. They did not realise that by saving their payment details, they were already subscribed. They later received a notification via PayPal that they had been charged and found it difficult to contact HelloFresh regarding the payment at a time when they were experiencing financial distress.
In another case, a consumer signed up for a Youfoodz subscription, which they cancelled online within minutes of viewing the menu. They later received a text stating their delivery would arrive the following day and they had been charged. They called Youfoodz multiple times to request a refund and were eventually offered a 50 per cent refund.
Background
HelloFresh and Youfoodz are both owned by the German-based parent company HelloFresh SE. HelloFresh offers weekly meal kits, whereas Youfoodz offers weekly ready-made meals.
Consumers can sign up for HelloFresh’s or Youfoodz’s services through their websites or their smartphone applications.
The ACCC commenced its investigation into HelloFresh and Youfoodz in October 2024 after receiving a large number of consumer complaints.
Revellers will welcome in 2026 with two spectacular New Year’s Eve fireworks displays at 9.15pm and midnight at ground level from the Poppet Head in Rosalind Park courtesy of the City of Greater Bendigo’s annual Summer in the Parks program.
Greater Bendigo Mayor Cr Thomas Prince said it’s a tradition to welcome in the new year with fireworks and Bendigo’s annual New Year’s Eve firework displays are enjoyed by many hundreds of people.
“The City is again pleased to present both firework displays and I encourage residents to gather at the QEO which is the best viewing spot to watch the fireworks and welcome in 2026,” Cr Prince said.
“While we all love fireworks, the noise they make can often frighten animals, so if you have pets please ensure they are safe and securely confined on New Year’s Eve.
“The community are also reminded that the QEO car park will be closed from 6am Wednesday December 31, until 6am Thursday January 1, to provide a safe zone around the set up for the fireworks.
“There’s plenty more outdoor fun coming in January, February and March with the Summer in the Parks program presenting a wide range of live music events and classic family movie nights, outdoor kids’ activities and come and try activities.
“It’s a great opportunity to enjoy free entertainment and activities in our beautiful parks and in the city centre, support our local businesses where you can and dine out or picnic with family and friends.”
To keep updated on the Summer in the Parks program of events, activities, times, and dates, please visit:
Let me begin by acknowledging the tragic events in Bondi over the weekend. Our thoughts and condolences go out to anyone who has been affected.
Thank you to AusPayNet for the opportunity to join you all here at the annual Summit. Though this forum has been running for less than a decade, it has emerged as a centrepiece on the calendar for both industry and regulators. I suspect that at least some part of the reason we have a world-class payments system in Australia is because we have opportunities like this where a range of big ideas for the future of the system can be thoroughly debated. Long may this spirit of engagement continue.
It is difficult to think of another time where developments in the payments and digital money ecosystems – in Australia and abroad – were more fascinating than now. There are big structural forces reshaping the operating environment, technological change and geopolitical disruption among them. This change is amplifying both risks and opportunities. As Governor Michele Bullock observed in her Bradfield Oration, our collective challenge is to manage both in a way that improves the lives of all Australians.
The key question I will address in my remarks today is this – in a period of profound structural change, how can we build an ecosystem for payments and market infrastructure that is both highly resilient and highly innovative? One that is not just able to weather storms, but as I discussed recently, ‘anti-fragile’, in the sense that it stands to benefit from change and disruption.
It is no accident that the twin themes of resilience and innovation underpin the RBA’s refreshed payments policy strategy out to 2027. This strategy has recently been endorsed and published by the Payments System Board (PSB) to assist industry in their prioritisation efforts. Conscious that industry already has plenty on its plate, the RBA’s contribution to the implementation plan of the Council of Financial Regulators (CFR) ‘Better Regulation Roadmap’ will also shortly be published to provide industry with additional visibility over the sequencing of our wider priority set. The bottom line today is that I am optimistic our system is up to this twin challenge, but it will require everyone involved – industry and regulators – to prioritise somewhat differently to recent decades.
Why resilience, why now?
If we step back for a moment and consider the properties of resilience that could apply to any technical system – not just payments – and one whose operating environment is changing in material ways, quite a few possibilities spring to mind: interoperability, diversity, redundancy and adaptability. Each of these brings pros and cons on their own of course, and how they interact is critical – as a case in point, if diversity simply translates to duplicating systems with limited interoperability, there may be more costs than benefits to the wider system. But in the years ahead, I suspect that concepts like these will feature more prominently in the design of our payments system and associated infrastructure.
To move from the conceptual to the concrete, a safe and resilient payments system underpins economic activity in Australia. Every day, the average daily value of payments settled at the RBA through our real-time gross settlement system is equivalent to more than 10 per cent of Australia’s annual GDP. The size and interconnectivity of our payments system means that major disruptions could have systemic consequences – for financial stability, economic activity and, in extreme cases, social cohesion. This is a sobering reality. Three themes stand out here, all structural rather than cyclical in nature.
The first relates to our deteriorating strategic circumstances. As the Director-General of the Office of National Intelligence recently reminded us: the pace and gravity of strategic change is accelerating, our region is now the epicentre of global systemic rivalry and our operating environment is one where coercion below the threshold of conflict is becoming normalised. This makes for a less forgiving and less predictable world. The potential for external shocks to threaten the provision of critical financial services is rising, and the risk of coordination failure is larger for adverse geopolitical scenarios compared with more traditional financial risks. This realisation has been informing a program of work overseen by the CFR for some time now.
The second source of structural change relates to technological transformation. Increasing digitalisation is yielding substantial efficiencies for the financial system and making new functionality possible. At the same time, it is expanding the attack surface for cyber intrusions and making the potential consequences of operational disruptions more severe. Applications of artificial intelligence (AI) reflect both sides of this coin. The financial system is contending with accelerating waves of distributed denial of service attacks, and the commercialisation of cybercrime on the dark web is becoming big business. A concentrated group of key third-party technology providers are increasingly performing critical functions, such that a major disruption in one could have ripple effects across the entire system. Last year’s Crowdstrike episode, and the Amazon Web Services outage a couple of months ago, are just a couple of recent reminders.
A third and related challenge is that interdependencies between the payments system and other critical national infrastructure are coming into sharper focus. It can be taken for granted that the functioning of our financial system, and the payments system within it, is dependent on the smooth functioning of the electrical grid and telecommunications network. But these core services are increasingly experiencing their own resilience challenges, which can have downstream impacts on the broader economy. A recent example was the April 2025 blackout of the Iberian Peninsula that affected 50 million households and saw daily economic activity and electronic retail payments in Spain decline by approximately half. This disruption could easily have been worse, had the geographical span of the outage been different and cash not been readily available as a means of payment.
Recognising it is insufficient to just admire these problems from a distance, let me turn now to several related priorities in the RBA’s forward work program. A common theme here is the importance of payments infrastructures investing in their governance, risk management capabilities and operational resilience to meet not just regulator expectations but also those of the wider community.
System-wide interdependencies
One element is a stepped-up focus on system-wide interdependency and concentration risk. We are conscious that individual entities may have limited visibility over the extent to which their vulnerability to third-party providers or single points of failure is mirrored elsewhere and could amplify disruptions if a large shock were to occur. As a result, the RBA has embarked on a program of analysis and outreach with industry and other arms of government. The scope of this work ranges from high-value payments through to retail point-of-sale and account-to-account (A2A) transfers. We are actively engaging with CFR agencies, the Department of Home Affairs, national security agencies, overseas central banks, other non-financial regulators and industry, in order to develop a more holistic system-wide mapping of vulnerabilities.
A notable example where our collaboration with industry is spurring both increased resilience and innovation is through the Industry Resilience Initiative. Here, the RBA and the Australian Prudential Regulation Authority (APRA) are working with banks, Australian Payments Plus and AusPayNet to enhance existing contingency capabilities so that payment services can continue to operate, even if in a reduced form, in the event of a significant shock like a major institution ‘going dark’ for some time.
Another area where we see the concepts of system-wide resilience and innovation coming together is in quantum computing. The brute-force computing power enabled by quantum computing offers intriguing possibilities – it will unleash capabilities in the financial system that are not currently possible, especially when coupled with AI. At the same time, these advances could pose first-order data security risks and so compromise the integrity of the financial system. We know that threat actors are already capturing data with the expectation of breaking current encryption down the track – a strategy known as ‘harvest now, decrypt later’.
As a result, the PSB strongly supports industry efforts to migrate card payments to the Advanced Encryption Standard (AES). AES is viewed as a quantum-safe solution, should advances in quantum computing undermine the secure exchange of payment details. Some European countries are already there. The PSB expects industry to progress migration with sufficient urgency to enable the readiness of AES for use by 2030 and has agreed to consult around the middle of next year on using the RBA’s standard-setting powers under the Payment Systems (Regulation) Act 1998 (PSRA) to support the migration.
Cash distribution
Another element of our work on payments system resilience relates to cash access. Not only does cash remain an essential part of the payments system – 1.5 million Australians still rely on it to make everyday payments – cash also provides a backup for localised disruptions (e.g. floods and fires) when digital payments are unavailable. In this sense, physical cash is an ‘all hazards’ digital hedge. In discussions with my international counterparts, I am increasingly struck by how uniform the view has become about the critical contingency role cash can play in the economy. Sweden is one example, where authorities are now requiring cash distribution entities to maintain a heightened level of crisis preparedness and a public campaign has been launched to advise the community to maintain personal cash holdings in preparation for crises.
The RBA fully supports the Government’s commitment to ensuring that Australians retain adequate access to cash for as long as they wish to use it. Accordingly, the RBA, CFR and the Australian Competition and Consumer Commission (ACCC) have consulted on regulatory arrangements for the cash distribution system that are designed to ensure the system remains on a strong footing far into the future. In seeking to promote system-wide resilience, the framework embeds crisis readiness and resolution powers as key features.
Promoting an innovative and resilient payments system
Ensuring our payments system can withstand extreme-but-plausible disruptions should not mean innovation grinds to a halt. Quite the contrary. Australia has always been up around the front of the pack regarding innovation in the payments system. In the context of our national productivity challenge, it is important that this remains so. And as I have stressed before, there are big opportunities ahead of us if we can harness innovation in ways that not only enhance efficiency but also resilience – there need not be a trade-off.
To help play our part in fostering an innovative payment system, we have several initiatives underway.
Project Acacia and the Future of Money
One is Project Acacia, the centrepiece of our Future of Money program this year. Working alongside industry, regulators and our research partners at the Digital Finance Cooperative Research Centre, we are exploring how new forms of digital money and financial infrastructure could support the development of tokenised asset markets in Australia. This is also a growing area of interest for central banks and industry globally. We’ve taken the step of issuing pilot central bank digital currency onto external digital ledger platforms to better understand how new forms of money and tokenised assets could more seamlessly interact on the same ledger. This includes where trading and settlement are synchronised into a single function – obviating the need for clearing or tying up of collateral for days. The project has also explored the role that private digital money, in the form of tokenised bank deposits and stablecoins, could play in tokenised asset markets.
It has been pleasing to see Acacia draw strong interest from a wide cross-section of industry, from large banks to smaller fintechs to technology companies. Across more than 20 use cases, a range of real-world assets have been tokenised: government bonds, money market securities, mining royalties and repurchase agreements among them. We’ve deliberately not been prescriptive about these use cases, as we have wanted to hear from those on the front line of industry innovation where they think the largest potential benefits could be for the Australian financial system.
The experiments will be wrapping up shortly. I will have more to say about Acacia and our related strategic priorities on the Future of Money at the end of March, and shortly thereafter the Acacia project report will be published. But for now, I’d like to thank all our project partners for their contribution to the project – it has been a leading example of how the public and private sectors can collaborate on important policy issues arising from the application of frontier technologies.
Future of account-to-account payments
Let me now turn to a topic I addressed at last year’s Summit that also sits at the intersection of innovation and resilience – the future of Australia’s A2A payments system. At that time, and as our risk assessment of the decommissioning of the Bulk Electronic Clearing System (BECS) later set out in detail, the feedback we received from a range of stakeholders suggested that a foundational element was missing in the migration to modern payment rails – a shared vision among industry on the desired features of the future system. We shared industry concerns that loading more risk onto modern rails that had higher outage rates than the legacy bulk system was going to be problematic if contingency arrangements were not also significantly uplifted.
To support strategic planning by industry, RBA staff published a Public Interest Framework in July. The framework outlines technology-agnostic principles that prioritise the reliability of the payments system through robust contingency arrangements, alongside new functionality spurred by competition and innovation. As an example, we view interoperability – the ability for different payment systems to connect to each other – as integral to promoting resilience, competition and efficiency. In good times, end users will have greater choice over their providers; when systems go down, contingency options will be available.
Fast forward to today, and I am pleased to say that industry has made important progress, including in establishing a new coordination forum and completing an end user consultation to inform the future vision for A2A payments. At the same time, there is still a big lift ahead: key outstanding issues include the processing of large volumes, the account reach of the New Payments Platform (NPP) and contingency arrangements.
We want to thank industry for engaging in the A2A reset over the past year. We recognise it has not been easy. As we have said all along, if it takes industry a little longer than originally envisaged to come to a shared understanding of the system’s central features, then it should be time well spent. For our part, RBA staff will continue to engage with industry via the A2A Roundtable and in March 2026 we will publish an update on the risks associated with the migration.
We are all striving for the same objective – that Australians can benefit from the features that modern payment systems such as the NPP can provide. These include 24/7 real-time payments, richer data, confirmation of payee and real-time verification of payment. To achieve this, we need everyone in the ecosystem to continue engaging – payments service providers (PSPs), and corporate and government end users.
Modernising the RBA’s settlement system to support innovation
Ensuring that Australia’s financial infrastructure is fit for the future is a key focus of ours. This can be seen not only in our involvement in initiatives like Project Acacia and the modernisation of Australia’s A2A system, but also in the RBA’s forthcoming strategic modernisation of Australia’s high-value real-time settlement system – the Reserve Bank Information and Transfer System (RITS). The last major innovation in RITS occurred in 2018, with the public launch of the Fast Settlement Service. This system enables real-time, 24/7 settlement of NPP transactions and currently processes about four million transactions per day – most in under a second. The RITS modernisation project will explore a range of options to ensure our critical settlement infrastructure can support the evolving needs of the financial system well into the future.
Enhancing cross-border payments
Under the G20 roadmap, Australia is committed to supporting the international effort to address challenges in cross-border payments. A priority for the RBA in recent years has been engaging with industry over the adoption of richer data and new capabilities in Australia’s cross-border payments infrastructure. Next year, we will be examining ways to enhance wholesale cross-border payments, including as it relates to our RITS modernisation project and research on the role of digital money. We are also collaborating with central bank partners on a second phase of the BIS Innovation Hub’s Project Mandala. This project explores protocols to automate regulatory compliance processes in cross-border payments using new technologies like digital ledgers. The aim here is to make cross-border payments more transparent, faster and safer.
Supporting national reform priorities
In light of the Government’s efforts to modernise Australia’s payments regulatory framework, the RBA also has a number of initiatives in train.
First, following the recent amendments to the PSRA, the RBA will publicly consult on the PSB’s regulatory priorities in mid-2026, taking into account these amendments and technology modernisation in the payments industry. The focus will extend to regulatory issues beyond those addressed in the Review of Merchant Card Payment Costs and Surcharging. The consultation will include efficiency, competitiveness and safety issues with mobile wallets, three-party schemes, buy-now-pay-later providers and e-commerce platforms. We look forward to your input.
Second, the RBA will be reviewing its policies for accessing Exchange Settlement Accounts to support competition and innovation in payments. We expect to commence this review in the second half of 2026, once the first tranche of the Government’s PSP licensing reforms has passed Parliament and work on the second tranche has begun. This second phase includes the proposed common access requirements. This framework would involve APRA setting proportionate regulatory and supervisory arrangements for non-bank PSPs seeking to directly access Australian payment systems. In the meantime, we are engaging with our peer central banks to better understand how they see the competition and financial stability implications from stablecoin issuers holding funds in central bank deposits. We note the regulatory framework for the licensing and prudential supervision of issuers of Australian dollar-denominated stablecoins is an important pillar of the Government’s approach to developing responsible innovation in the Australian digital asset industry.
Third, to support responsible innovation in the wider financial system, the RBA will be providing input into the review of Australia’s Enhanced Regulatory Sandbox (ERS). Similarly, as a result of its learnings from Project Acacia, we are examining whether and how a dedicated digital securities sandbox could further support the development of tokenised markets and complement the general purpose ERS. We are looking closely at the experience in places like the United Kingdom, euro area, Switzerland and others to guide us here.
Update on the Review of Retail Payments Regulation
Before I close, it would be remiss not to provide a brief update on the current Review of Merchant Card Payment Costs and Surcharging, which includes a package of proposed reforms:
reductions in ‘downstream’ consumer payment costs via changes to the surcharging regime for eftpos, Mastercard and Visa networks
reductions in ‘upstream’ payment costs incurred by Australian merchants, via their service provider, in the form of lower interchange rates on card transactions
increased disclosure of fees charged by acquirers, and collection and publication of wholesale fees charged by card networks, to help ensure savings from lower interchange are passed through to Australian merchants.
We received more than 170 submissions from a broad cross-section of stakeholders, including merchants, issuers, acquirers, PSPs and the card networks. It is fair to say that each of these stakeholders come at the issues from different perspectives, so we are carefully weighing the balance of the various arguments as they relate to our mandate. Given the reforms will inevitably result in some redistribution of costs and benefits across the system, we recognise it won’t be possible to please all stakeholders. But when the PSB publishes its conclusions and an implementation timeline for any regulatory action by March 2026, I can assure you that a huge volume of information, consultation meetings, requests for further information, and so on, will have been channelled towards landing on a package that we believe most promotes the public interest. The PSB is also aiming to ensure that decisions on issues like the scope of surcharging and the extent of interchange cuts will not be affected by the recent amendments to the PSRA.
Conclusion
Let me conclude. We should all aspire for a payments system that is safe and resilient – one that Australians can rely on – and one that is a hotbed of innovation and competitive efficiency. I’ve set out today a number of the opportunities we see here. They are reflected in our priorities that span regulatory reform, the Future of Money and tokenisation, A2A payments, the Industry Resilience Initiative, cross-border payments, quantum-safe encryption standards, physical cash and the modernisation of RITS. As we realise that the sequencing of priorities is always a challenge, my colleagues at the RBA and on the PSB are more committed than ever to working constructively with AusPayNet and the wider industry. There is much to celebrate in the Australian payments system, and we all want to ensure this remains the case far into the future.
Thank you, and I look forward to taking your questions.
Statement on National Cabinet meeting: responding to the Bondi terrorist attack – Chief Minister, Treasury and Economic Development Directorate
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The ACT Government strongly endorses the agreed outcomes of the National Cabinet meeting convened by the Prime Minister this afternoon.
The National Cabinet pledged to eradicate anti-Semitism, hate, violence and terrorism and emphasised Australia’s commitment to national coordination on countering terrorism and violent extremism, social cohesion, resourcing and rhetoric to ensure community safety.
National Cabinet noted the ongoing work across the country to tackle anti-Semitism such as establishing the National Hate Crimes and Incidents Database, enhancing security of Jewish community and cultural sites, and coordinated work across intelligence and police agencies.
We also recognise that action is needed on gun law reform, including renegotiating the National Firearms Agreement to ensure it remains as robust as possible in today’s changing security environment.
Work already underway in the ACT includes reviewing existing registry systems and processes, exploring technology options and assessing ACT firearms legislation to identify the changes needed to support the new digital registry. This will include reforms relating to privately manufactured and 3D-printed firearms, permit-to-acquire arrangements and suitability criteria for firearms licences and other authorisations.
National Cabinet has also agreed that Australian citizenship should be an additional condition of licenses.
I have commissioned the Attorney General and the Minister for Police, Fire and Emergency Services to progress this important work.
Yesterday’s horrific anti-Semitic terrorist attack has no place in Australia, and the evil scourge of anti-Semitism must be eradicated.
Our condolences and our thoughts are with those who have been impacted directly by this terrorist attack.
The Government has also commissioned an online condolence book for the community to express support for both the victims and the broader Jewish community in Canberra and across Australia.
Tasmania Police officers support Bleed4Blue campaign
Monday, 15 December 2025 – 4:30 pm.
Meet the Tasmania Police officers whose blood really is worth bottling.
The group from Hobart Division is among Tasmania Police officers across the state participating in Bleed4 Blue, an annual blood drive from December to February which challenges law enforcement officers to sign up to donate blood.
Inspector John Toohey, a regular blood donor, said Bleed4Blue was another positive way for police to contribute to the community.
“As police officers, we’re committed to saving lives every day,” he said.
“Donating plasma and whole blood is another way we can make a real difference. It’s a simple act that speaks volumes about our duty of care for the community.”
“Rolling up your sleeve is easy, and it means someone out there gets the treatment they need.”
Hobart Constable Corrine Falls said she was proud to take part in Bleed4Blue.
“Being a blood donor is something I have thought about doing for a while and now, I’ve been able to come along and make my first donation,” she said.
“It’s an opportunity to do a good deed.”
Launched in 2018, Bleed4Blue is an annual, three-month law enforcement-focused blood drive created after the life of Detective Sergeant John Breda from NSW Police was saved by blood donations after being attacked in Maroubra.
Lifeblood Tasmania’s Leanne Murdock said since 2018, more than 37,000 donations have been made nationally as part of the Bleed4Blue.
“Lifeblood thanks Tasmania Police for supporting Bleed4Blue, and hopes that the community will be inspired to follow in their lead and donate too,” Ms Murdock said.
“The donations from Tasmania Police come at an important time when many regular donors are busy preparing for the holiday season, which can put a strain on blood stocks.
“Every 18 seconds, someone somewhere in Australia will need blood or plasma.
“Cancer patients, trauma victims, and newborn babies and new mums are just a few of those who will rely on blood donations.”
A nationwide donation day for police will be held on February 4.
To find out how you can make every drop count, contact Lifeblood on 13 14 95 or go online to lifeblood.com.au
Police made 38 arrests and recovered stolen property worth thousands of dollars during a two-day blitz on retail crime in major retail hubs in Hobart, Launceston, Devonport and Burnie.
The operation late last week involved 35 businesses operating 70 stores across the state.
Tasmania Police resources included members of taskforces Saturate, Accountable, Respect, Scelus and Raven, as well as uniformed officers, detectives and specialist resources.
Some retailers employed covert security teams as part of the operation.
Inspector John Toohey said the initiative showed the value of police, retailers and the community working together against retail crime and anti-social behaviour.
“Retail crime impacts businesses, staff, and customers. This operation shows what can be achieved when we work collaboratively to create safer shopping environments,” he said.
“Our officers were deployed strategically to high-risk areas, supported by real-time communication with retailers.
This allowed us to respond quickly to offending as it occurred and target repeat offenders.”
Over Wednesday and Thursday, police processed 60 offenders, including 38 arrests, 16 summonses, and six youth diversions.
Offenders ranged in age from 13 to 55 years, with 53 people identified as repeat offenders.
Stolen property worth thousands of dollars was recovered and returned to retailers. Commonly targeted items included clothing, sunglasses, groceries, and household goods.
Inspector Toohey said future operations were planned.
“The strong presence of law enforcement and the vigilance of retailers play a critical role in deterring opportunistic theft and disrupting ongoing criminal activity”, he said.
Members of the public can play a role in disrupting retail crime through Crime Stoppers Tasmania’s Know Them? Name Them! campaign, which uses social media to help identify suspected shoplifters and reduce retail crime.
Crime Stoppers Tasmania chair David Daniels said the joint initiative with Tasmania Police had helped identify almost 70 suspects over a seven-month period.
“We encourage people to visit crimestopperstas.com.au and view the open cases,” Mr Daniels said.
“This is a chance for people to speak up and help police, help local business, and help the community as a whole.”
To report retail crime, call police on 131 444 or anonymously to Crime Stoppers on 1800 333 000.
The City of Greater Bendigo is offering in-person support to some 405 Solstice Energy customers in Heathcote and Marong to transition from compressed natural gas following the announcement that Solstice Energy will decommission its gas network in these towns from August 2026.
There are 100 households impacted in Heathcote and 305 in Marong who are required to indicate directly to Solstice Energy if they want to change their hot water, heating, or cooking appliances to electric or bottled LPG by deadlines in March 2026. They must do this by recording their decision on the Solstice Energy website.
City of Greater Bendigo Healthy Communities and Environments Director Jess Howard said the City is supporting local affected Solstice Energy customers to make their decision by holding Drop-In Sessions in Heathcote and Marong from January to March where they can come and ask any questions they may have and talk through their options.
“Solstice Energy customers can also book in for an In-Home Energy Snapshot that will discuss potential electrification of appliances, ways to reduce the need for heating and cooling in the home, and to make a plan if needed,” Ms Howard said.
“The City understands that the transition can feel overwhelming, so we want to make it easier for residents by holding the Drop-In Sessions and In-Home Energy Snapshots.
“Our Drop-In Sessions and new In-Home Energy Snapshots are designed to give impacted residents clear, practical advice so they can make informed choices about their heating, hot water, and cooking.
“This support is about more than helping people understand appliances, it’s about helping households to lower their bills and improve their comfort.
“Our study found that whilst the upfront cost of the transition to electric can be hard to manage, for many homes the payback is under four years.
“We’re helping households take a practical step towards our vision of a fair, sustainable and resilient Greater Bendigo, where every household can thrive in a changing climate.”
The following Drop-In Sessions will take place in January, February and March in Marong and Heathcote:
Good afternoon and thank you for the opportunity to speak at this conference. The theme – banking and financial stability – is a topic of deep interest to the RBA given our longstanding mandate to contribute to financial stability. And I would like to say thank you to all of you, for your work in this important area and contributing to our understanding of the issues.
Today I’m going to explore two broad questions relating to financial stability.
First, why does financial stability matter and what is the RBA’s responsibility in relation to it?
Second, how does the RBA deliver on its financial stability responsibility?
Along the way, I’ll highlight some of our ongoing work in this space and the issues that are on our mind. To summarise, our overall assessment is that in this period of elevated global uncertainty, the Australian financial system is well positioned to weather most shocks. However, we cannot be complacent. The nature of risks is changing and so there is ongoing work for regulators and industry to remain prepared in this evolving environment.
Why does financial stability matter and what is the RBA’s role?
Financial stability is important because of the role that the financial system plays in the everyday life of Australians.
The financial system is made up of a range of financial institutions. It includes banks, insurers, superannuation funds and non-bank lenders. It also includes financial markets, where financial assets such as shares, bonds and foreign exchange are bought and sold. And it includes market infrastructure, such as the payments system and other systems that support the trading of financial assets.
It is important that all these elements of the financial system are working well because together they provide the financial services that Australians depend on in their everyday life. More concretely, a well-functioning financial system enables households and businesses to:
save, borrow and invest – so that they can prepare for retirement, buy their first home, or purchase equipment to expand their businesses
make payments – so they can move money efficiently and securely, such as when they’re tapping their card to pay for groceries, or making payments for their bills online
insure against and manage risk – so they can protect themselves against unexpected costs, such as damage to or loss of property, or unexpected medical bills.
In other words, the financial system is vital in helping Australians get on in life and plan for the future. This means that if the financial system overall is not functioning well, it is costly for everyone.
For example, if banks are unwilling or unable to lend money, businesses might not get the working capital they need to run their operations, households might reduce spending further than otherwise, it can become more challenging to purchase a home and economic activity can suffer. Indeed, financial crises lead to economic hardship for many with long-lasting consequences for economic growth.
Another example is disruptions to payments systems, which can prevent salaries and pensions from being paid, households from buying the things they need and transactions in financial markets from settling, causing widespread difficulties.
Maintaining financial stability is about ensuring we have a financial system that is strong, operationally resilient and prepared for adverse conditions, so we can avoid these types of disruptions and their broader costs. This doesn’t mean reducing risk to the point that we compromise innovation, competition and efficiency. But it does mean ensuring resilience alongside these other features. Indeed, innovation and competition can lead to better ways to achieve resilience. We need a financial system that can support the economy by reliably providing the financial services that households and businesses depend on, both in good times and bad. A stable financial system promotes saving and investment, supporting lower funding costs, productive investment and thus longer term growth. So financial stability is a necessary underpinning to support the economic prosperity and welfare of Australians – which is the RBA’s overarching legislative objective.
Given the alignment between financial stability and the RBA’s other functions and objectives, the RBA – like other central banks – has long had a mandate to contribute to financial stability. This is a role that has evolved and changed over time. Initially it spanned all the way from liquidity provision to banking supervision. But in the late 1990s, this changed following the Financial System Inquiry (Wallis Review). Responsibility for banking supervision was transferred to a new separate agency – the Australian Prudential Regulation Authority (APRA), which was set up to bring the prudential functions of the RBA and Insurance and Superannuation Commission together into a dedicated agency. So unlike in some other countries, in Australia, the RBA, as the central bank, is not responsible for prudential supervision of these entities – that is APRA’s job.
Although the Australian Government’s response to the Wallis Review meant that supervision of these individual financial institutions was transferred to APRA, the RBA still retained a general (albeit non-legislated) responsibility to safeguard stability of the financial system as a whole. This reflects that the RBA, as the central bank, is well positioned to both assess financial system stability – given the breadth of our system-wide responsibilities – and to support financial system stability – given our balance sheet capacity to provide liquidity. We also cannot achieve our monetary policy objectives without financial stability. Relatedly, following the Wallis Review the RBA also gained enhanced powers to regulate the payments system to ensure it is secure, stable and efficient. The RBA’s responsibility to promote the stability of the Australian financial system was recognised by the Government at that time, and in subsequent agreements between the RBA and Treasury.
More recently, following the independent Review of the RBA in 2023, the RBA’s financial stability role was enshrined in legislation – making ‘contributing to financial stability’ a core part of the RBA’s legislative functions. The Review highlighted the importance of this for reinforcing accountabilities and strengthening the foundation of cooperation arrangements with other agencies that share a mandate for promoting financial stability.
How does the RBA deliver on its financial stability responsibility?
So how does the RBA deliver on this high-level responsibility to contribute to the stability of the Australian financial system? The answer is in a number of ways, and in conjunction with other agencies.
In Australia, delivering on financial stability is a team effort. Responsibilities are shared across several agencies, each with complementary mandates and policy tools (Figure 1).
Figure 1: The Australian Financial Regulatory Framework
As the central bank, the RBA has a range of responsibilities which I’ll cover in more detail shortly.
As I’ve already mentioned, APRA is the prudential regulation authority, responsible for regulating and supervising banks, insurers and superannuation funds, so that Australians’ financial interests are protected and the financial system is stable, competitive and efficient. This includes responsibility for macroprudential policy and bank resolution.
The Australian Securities and Investments Commission (ASIC) and the Treasury also have important financial stability roles. ASIC is responsible for market integrity and consumer protection across the financial services sector, and regulates clearing and settlement facilities (complementing the RBA’s supervision of those same facilities from a financial stability perspective). And the Treasury has an important role in advising the government on financial stability, including the financial regulatory framework. Treasury also has important policy tools that can help alleviate the economic impacts of financial crises.
These institutional arrangements and mix of responsibilities make cross-agency collaboration essential in Australia’s financial regulatory framework. And this is where the Council of Financial Regulators (CFR) comes in.
The role of the CFR
The CFR plays a crucial role in bringing together the RBA, APRA, ASIC and Treasury to coordinate and collaborate on financial stability issues. Its ultimate aim is to promote the stability of the Australian financial system and support effective and efficient regulation.
The CFR agencies work together to promote financial stability in three key ways:
We analyse vulnerabilities in the financial system that could amplify shocks, and work together to understand their potential impacts and coordinate policy and other actions to address them.
We support coordination of financial regulation, so that it is effective, efficient and promotes competition in the financial sector.
We maintain crisis readiness so the CFR agencies are as ready as can be to work together to respond to support financial stability in the event of future shocks.
Earlier this month, the CFR published its first annual update on its initiatives to address risks and vulnerabilities in the financial system – covering progress over 2025 and focus areas for the year ahead. These focus areas for 2026 are geopolitical vulnerabilities, operational vulnerabilities, systemic liquidity risk and high household leverage. Given the international environment of elevated uncertainty and geopolitical tensions, strengthening crisis readiness is a common theme running through much of this work.
While the CFR does not have formal regulatory or decision-making powers separate from those of its individual members, it has a strong track record of effective collaboration – including in response to the COVID-19 pandemic and the global financial crisis. The RBA Review in 2023 highlighted the importance of reinforcing cooperation arrangements among the CFR agencies for promoting financial stability. Consistent with this, the CFR Charter and Memorandums of Understanding between the agencies were updated earlier this year to clarify roles and responsibilities, and how agencies work together to promote financial stability.
Having talked about the CFR and its agencies, let me now turn to the specifics of the RBA’s role and how exactly we fulfil our financial stability responsibilities.
The RBA’s contribution to financial stability
The RBA contributes to financial stability in several distinct ways. Some contributions aim to be preventative – focused on promoting resilience and mitigating vulnerabilities, so that the financial system can withstand a wide range of adverse conditions. Others are curative – designed to contain disruptions and restore confidence during periods of financial stress. We’ve recently set out the RBA’s framework for contributing to financial stability on our website as part of our broader commitment to enhance transparency and public understanding of the work we do. I’ll now step through the elements of this framework (see below).
Setting monetary policy to achieve the MPB’s inflation and full employment objectives
Working with CFR agencies to identify and monitor financial stability risks and vulnerabilities, and coordinate policies to address them, including by:
providing financial stability advice to the CFR and APRA
maintaining crisis readiness
Using the flexibility of the monetary policy framework to manage monetary policy and financial stability interactions where they arise, and communicating appropriately
Providing adequate liquidity to the financial system, including in exceptional circumstances
Intervening in financial markets where appropriate to address market dysfunction
Undertaking and regularly communicating assessments of financial stability (including through the Financial Stability Review)
Engaging in international forums to support regional and global financial stability and promote effective standards and cooperation
Determining payments system policy (including in relation to clearing and settlement facilities) and operating Australia’s real-time gross settlement system
Monetary policy
Arguably the most fundamental way the RBA supports financial stability is by setting monetary policy to achieve low and stable inflation and full employment. To see why, let’s consider the alternative. For example, unemployment is the most common reason why households are unable to repay debt owed to banks, which can lead to loan losses for banks. High inflation can also trigger financial difficulties for households and businesses by leading to higher interest rates and lower real incomes, in turn affecting their ability to service loans. If a sufficiently large number of borrowers were to fall into negative equity and default on their loans, lenders could face widespread losses as a result. If these losses were large enough, this could lead to lenders sharply restricting the supply of credit to even very sound borrowers. This could disrupt economic activity and add to unemployment. And if households and businesses become concerned that their deposits at banks might not be safe, financial system stability and economic activity will be disrupted further still. So by setting monetary policy to achieve our objectives of low inflation and full employment, the RBA has a key role to play in helping create the economic conditions that support stability in the financial system.
Likewise, a stable financial system supports us to achieve low inflation and full employment. Well-functioning financial markets and institutions are essential for the transmission of monetary policy, and history has shown that episodes of financial instability can have lasting impacts on the economy and employment.
Working with the CFR agencies
As I’ve already discussed, the RBA also works closely with the other CFR agencies to support financial stability. As part of this, the RBA advises the other CFR agencies on the outlook for financial stability, including if monetary policy might affect – or be affected by – financial stability concerns.
As noted earlier, monetary policy and financial stability objectives are generally complementary, and indeed necessary for each other in the longer term. However, there can be times when monetary policy actions needed to deliver price stability and full employment may not align perfectly with financial stability goals. For example, an extended period of accommodative monetary policy required to lift employment and inflation to their appropriate levels could potentially contribute to the build-up of leverage and imprudent risk-taking in parts of the financial system. A tightening in monetary policy to control inflation at a later point could then expose these vulnerabilities.
As part of managing these interactions, the Monetary Policy Board has committed to ensuring the CFR is informed when there are material interactions between financial stability and monetary policy. This is important to support coordination of policies to address financial stability risks across the CFR, including the use of APRA’s macroprudential policy tools. In this context, the RBA and APRA have recognised that APRA’s macroprudential policy, as a financial stability tool, is better placed in most circumstances to address the build-up of certain systemic vulnerabilities than monetary policy.
The RBA now provides financial stability advice to the CFR and APRA on a regular basis, and at least annually to accompany APRA’s update to the CFR on macroprudential policy, most recently at the September 2025 CFR meeting. In that context, the RBA noted that housing credit growth has picked up, driven by strong growth in lending to investors, as borrowers have responded to lower interest rates. However, lending standards have remained sound and riskier forms of lending – such as high-loan-to-valuation-ratio (LVR) loans, high-debt-to-income (DTI) loans and interest-only loans – have edged up only slightly (Graph 1).
Graph 1
Looking forward, however, vulnerabilities could build if households begin to take on excessive debt. One way this could play out is if there was a sharp rise of investor activity from already elevated levels that results in rapid and unsustainable increases in housing prices, leverage and/or an easing in lending standards as other borrowers try to keep up.
The CFR has been discussing the importance of taking pro-active steps to prevent vulnerabilities building in the financial system over time. In this context, the CFR supported APRA’s recent decision to activate a new macroprudential policy tool – limits on high DTI lending – to pre-emptively contain the build-up of housing-related vulnerabilities in the financial system. These limits are not currently binding but would become so if high DTI lending were to pick up materially from here.
Managing monetary policy and financial stability interactions
Of course, macroprudential policy and other financial stability tools are not always going to be the answer, or at least not the whole answer. There may be circumstances where they cannot fully address financial stability concerns, either because of the nature of the financial vulnerability or because the relevant financial stability tools are not available or used. Where that has implications for the achievement of the RBA’s inflation and employment objectives, the Monetary Policy Board has flexibility in its framework to account for those concerns.
This could include circumstances where financial system vulnerabilities are assessed to be accumulating over time, resulting in a trade-off between the RBA’s ability to meet its monetary policy objectives at different time horizons. For example, holding interest rates low might, in certain circumstances, be needed to ensure the RBA achieves its inflation and employment objectives in the short-to-medium term, but in doing so result in an accumulation of vulnerabilities that pose a risk to longer term inflation and employment outcomes. As I mentioned earlier, macroprudential tools are often most appropriate in such circumstances. But if that proved unworkable or ineffective, the Monetary Policy Board might need to consider setting monetary policy so as to return inflation to target over a slightly longer timeframe than it otherwise would if there were no financial stability concerns. The Board’s actual decision would, of course, depend on the specifics of the situation and their assessment of the risks. But as highlighted in the RBA Review, transparency about decision-making is important. In any circumstance where financial stability considerations have had a bearing on the monetary policy decision, the Monetary Policy Board will clearly communicate how its decisions remained consistent with achieving its monetary policy objectives. That includes explaining:
how and why it might use the flexibility in its monetary policy framework to take account of financial stability considerations relevant to the outlook for inflation and employment
how it had assessed any trade-offs in its ability to achieve its monetary policy objectives in the short vs medium term
why financial stability policies may not be sufficient to fully address the financial stability concerns.
To be clear, none of these considerations are bearing on monetary policy at the moment. Given the resilience in the Australian financial system, the Monetary Policy Board recently observed that there are no immediate implications for monetary policy arising from domestic financial stability considerations.
Each of the contributions to financial stability I have mentioned so far are underpinned by the RBA’s ongoing monitoring and assessment of financial stability. Our own research and analysis is complemented by insights from others in Australia and abroad, importantly including liaison with Australian financial institutions, businesses and community services organisations, as well as the other CFR agencies.
We publish a comprehensive financial stability assessment twice yearly in the RBA’s Financial Stability Review. This includes where we see potential risks to financial stability and vulnerabilities in the financial system, given the prevailing domestic and international environment. To make this assessment, we also consider the resilience of households, businesses, banks and non-bank financial institutions in the face of potential shocks.
By making sure there is good information about where the risks and vulnerabilities lie in our financial system, we can support good decision-making by individuals, businesses and policy-makers to address and manage these threats, and to limit excessive risk-taking. This is another way the RBA contributes to financial stability.
The RBA published its most recent Financial Stability Review in October (see below). A key takeaway was that the heightened risk in the international environment means a systemic risk is most likely to come from abroad. However, our judgement is that Australian households, businesses and banks are well placed to weather most shocks. This is thanks to ongoing strength in the labour market, prudent lending standards and high levels of bank capital and liquidity.
Financial Stability Review, October 2025
The Australian financial system is well placed to withstand most shocks but continued effort is needed to stay prepared for emerging challenges
Global environment The global financial system has remained stable but is facing heightened uncertainty.
Households Budget pressures on Australian households have been gradually easing.
Banks The Australian banking system is in good shape.
Global environment The global financial system has remained stable but is facing heightened uncertainty.
Households Budget pressures on Australian households have been gradually easing.
Banks The Australian banking system is in good shape.
However, this is certainly not an environment we want to become complacent in. There are two key issues here we called out in the Review.
First, it is important that lending standards remain sound so that the good level of financial resilience among households and businesses is not undermined over time. APRA’s pre-emptive introduction of high DTI lending limits will help in this regard.
Second, it is important that financial institutions continue to build their resilience to geopolitical and operational risks. These threats are intensifying, and we are alert to the prospect that financial and operational stress events occur at the same time. We got some sense of the potential challenges here in April this year, when cyber-attacks on the Australian superannuation sector coincided with stressed conditions in financial markets. There is, accordingly, a big program of work underway across the CFR agencies, government and industry to strengthen resilience both of individual institutions and the financial system as a whole.
So the upshot of all that is while the Australian financial system is starting from a good place, there is work to do to keep up with the evolving environment.
Crisis management, liquidity provision and financial market intervention
Having discussed the things the RBA does to support financial stability in advance, let me now turn to what we stand ready to do in the event a shock does occur. This includes our responsibilities in crisis management (in coordination with the CFR) and through our role as the ultimate provider of liquidity to the financial system.
The RBA works with the CFR agencies to maintain crisis management readiness and ensure effective responses to a range of potential or actual instances of financial instability. These may include material stresses in financial institutions, disruptions in financial markets, interruptions to the smooth functioning of financial market infrastructure, or major operational disruptions affecting the provision of financial services.
Each CFR agency has a range of responsibilities that collectively contribute to the CFR’s crisis management arrangements. Fortunately, Australia has not had to contend with the failure of a key financial institution for many years. But to remain prepared, the CFR conducts regular crisis exercises and simulations – including joint exercises with the New Zealand financial authorities (through the Trans-Tasman Council on Banking Supervision). And we have, of course, had real life practice at responding to various shocks to the financial system, such as the COVID-19 pandemic, all of which our financial system has managed to weather.
In a crisis situation the RBA has a number of responsibilities. First, the RBA has lead responsibility among the CFR agencies for monitoring systemic risk (including in financial markets, clearing and settlement systems, and the payments system).
The RBA is also responsible for adjusting the supply of liquidity to institutions or markets as appropriate.
In exceptionally rare circumstances, this could include providing liquidity assistance to a bank or clearing and settlement facility that is solvent but facing acute liquidity pressures. To provide such ‘exceptional liquidity assistance’, the Monetary Policy Board would need to be satisfied that to do so was needed to contribute to the stability of the Australian financial system, in line with its legislative responsibilities.
In rare instances of market-wide liquidity stress, the RBA may also determine it is appropriate to provide liquidity support to eligible counterparties more broadly. This is the approach the RBA adopted in response to the disruptions following the outbreak of the pandemic in March 2020, when we adjusted the size and frequency of our repurchase operations and broadened the range of accepted collateral to support financial stability.
I should also note here that the RBA’s provision of liquidity in normal times is also an important contributor to maintaining financial stability. This occurs through the RBA’s standard liquidity facilities as part of implementing monetary policy and ensuring banks have enough cash (or liquidity) to meet their day-to-day obligations.
As well as ensuring adequate liquidity is provided to the financial system, in rare circumstances the RBA may also intervene in the markets for foreign exchange or bonds issued by Australian governments to address dysfunction in these markets where that dysfunction threatens broader financial stability. We can do this by temporarily buying and selling certain assets when markets are displaying signs of substantial illiquidity or there are very sharp changes in prices that do not appear to be explained by economic news or other market forces.
For example, during the period of exceptional instability at the onset of the pandemic, the RBA purchased Australian Government bonds and semi-government securities for this purpose. This helped restore market functioning, bringing bid-offer spreads back down to more normal levels (Graph 2). Effective functioning of the government bond market is important for financial stability because it is a key market that provides the pricing benchmark for many financial assets.
Graph 2
Finally, the RBA, in coordination with ASIC, is also responsible for the supervisory response to financial stress at clearing and settlement facilities and for the resolution of these facilities if required. This broadly mirrors the recovery and resolution role that APRA has for banks, insurers and superannuation funds.
Broader contributions to financial stability
While that gives you a flavour of how the RBA contributes to financial stability, the list is not exhaustive. The RBA engages with the CFR on a wide range of financial stability topics beyond those relevant to monetary and macroprudential policy. We are an active participant in international forums that support global and regional financial stability and promote effective standards and cooperation. And we play an important role in regulating and supervising the payments system – to ensure it is safe, competitive and efficient – and in managing Australia’s high-value payment system (the Reserve Bank Information and Transfer System or RITS).
Conclusion
In conclusion, financial stability matters. It ensures the financial system can reliably provide the financial services that Australians depend on through good times and bad. This is a critical foundation for Australia’s economic prosperity and welfare.
The RBA has long had a financial stability role, and we welcome that this now has a clear statutory basis following recent amendments to the Reserve Bank Act 1959. Delivering on this mandate involves a range of activities. The RBA contributes through its monetary policy, liquidity provision, payments system and financial market infrastructure oversight and public communication of where risks may lie or vulnerabilities may be building.
Equally important is our work with others. Collaboration across Australia’s financial regulators has always been central to maintaining financial stability. Through the CFR we have a strong track record of effective cooperation. Recent steps strengthen this collaboration further, by enhancing clarity of individual agencies’ responsibilities, the CFR’s collective objectives, and setting out clear and specific commitments for how the agencies will work together to promote financial stability.
While the Australian financial system is well positioned to weather most shocks, working together effectively is key to ensuring we remain prepared for any challenges ahead.