Christopher Kent: Bonds and benchmarks

Speech by Mr Christopher Kent, Assistant Governor (Financial Markets) of the Reserve Bank of Australia, at the KangaNews DCM Summit, Sydney, 19 March 2019.

The views expressed in this speech are those of the speaker and not the view of the BIS.

Introduction

It's wonderful to be back at the Debt Capital Markets Summit.

The past year in Australia was a bit of a mixed bag in terms of issuance of fixed income securities. Banks' issuance of bonds was high in net terms. Issuance of Residential Mortgage Backed Securities (RMBS) by the non-banks was also high. However, in the second half of 2018 issuance by Australian corporations outside of the financial sector was low. Today I'm going to discuss some of these trends.

I'll also discuss trends in yields. When I was at this event last year, I noted that spreads between corporate and government bonds had declined to be around their lowest levels since the global financial crisis.