Michele Bullock: Financial stability in uncertain times

Address by Ms Michele Bullock, Assistant Governor (Financial System) of the Reserve Bank of Australia, to Ayr Chamber of Commerce Event, online, 27 October 2020.

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

Thank you for the invitation to speak with you all today about financial stability. I would love to have been in Ayr in person. But the fact that I can't be with you all in the same room highlights the unusual times we currently live in, which has created so much uncertainty.

The timing of this speech is quite fortuitous because we released our six-monthly Financial Stability Review at the beginning of October. So today I plan to give you a quick tour through the key messages. The headline is that the financial system is strong and in a good position to support the economy through these difficult times. But there are risks, some emanating from overseas and others closer to home in the balance sheets of households and businesses. The Reserve Bank of Australia and the Council of Financial Regulators will be closely monitoring these risks over the coming months.

My plan today is to first talk a little about what we mean by financial stability and why it is important. Then I will touch on how we monitor financial stability and pull out some of the highlights of the Financial Stability Review.