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Financial Regulation and Australian Dollar Liquid Assets

Author

Listed:
  • Alexandra Heath

    (Reserve Bank of Australia)

  • Mark Manning

    (Reserve Bank of Australia)

Abstract

Liquid assets with low credit and market risk have a number of uses in financial markets, such as providing collateral against short-term funding or credit exposures that arise between counterparties to financial transactions. This article examines the existing sources of demand for Australian dollar-denominated liquid assets. Given relatively low levels of government debt in Australia, demand for these assets has been increasing relative to supply for some time. A further increase in demand arising from regulatory changes designed to improve the management of liquidity risk and counterparty credit risk will accentuate this trend.

Suggested Citation

  • Alexandra Heath & Mark Manning, 2012. "Financial Regulation and Australian Dollar Liquid Assets," RBA Bulletin (Print copy discontinued), Reserve Bank of Australia, pages 43-52, September.
    • Handle: RePEc:rba:rbabul:sep2012-06
    as

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    File URL: https://www.rba.gov.au/publications/bulletin/2012/sep/pdf/bu-0912-6.pdf
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    References listed on IDEAS

    as
    1. Matthew Boge & Ian Wilson, 2011. "The Domestic Market for Short-term Debt Securities," RBA Bulletin (Print copy discontinued), Reserve Bank of Australia, pages 39-48, September.
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    Citations

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    Cited by:

    1. Belinda Cheung & Mark Manning & Angus Moore, 2014. "The Effective Supply of Collateral in Australia," RBA Bulletin (Print copy discontinued), Reserve Bank of Australia, pages 53-66, September.
    2. Singh, M., 2013. "OTC derivatives market – regulatory developments and collateral dynamics," Financial Stability Review, Banque de France, issue 17, pages 207-213, April.
    3. Mr. Manmohan Singh, 2013. "The Changing Collateral Space," IMF Working Papers 2013/025, International Monetary Fund.
    4. Morten L Bech & Todd Keister, 2013. "On the Economics of Committed Liquidity Facilities," RBA Annual Conference Volume (Discontinued), in: Alexandra Heath & Matthew Lilley & Mark Manning (ed.),Liquidity and Funding Markets, Reserve Bank of Australia.

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