Christopher Kent: The usual transmission - monetary policy and financial conditions

Address by Mr Christopher Kent, Assistant Governor (Financial Markets) of the Reserve Bank of Australia, to the Finance & Treasury Association, Sydney, 13 August 2019.

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

Introduction

I'd like to start by thanking the Finance and Treasury Association for the opportunity to speak to you today about the transmission of monetary policy.

In my current position at the Reserve Bank I oversee the Financial Markets Group. Among other things, we spend our time analysing financial market developments, around the globe and in Australia. A key task is to consider the ways in which monetary policies are affecting economic developments. The first stage of that transmission is the effect of policies on financial conditions. The second stage of transmission - which I won't address today - is how those financial conditions then influence business and household decisions regarding investment and consumption, and the size and nature of their balance sheets.

The first two years or so in my current position were characterised by a degree of stability in financial markets.