Bulletin

The COVID-19 pandemic disrupted many parts of the Australian economy, including securities markets. These markets play an important role in our economy, including as a source of funding for firms and in the transmission of monetary policy. This article describes how Australian markets for private securities weathered the impact of…

Business investment plays a key role in our current and future economic prosperity. Aggregate investment can be difficult to predict, however. This may be because different firms face different investment environments, and the factors behind their decisions can vary. This gives rise to the question: which types of firms are…

Firms commonly evaluate potential investment projects by comparing expected returns to a hurdle rate. Survey evidence suggests that hurdle rates have remained high and well above the weighted average cost of capital (WACC) in recent years, as has the ex post return on invested capital for Australian-listed companies. This stickiness…

As part of our education program, the Reserve Bank of Australia (RBA) conducts school talks to promote economic literacy and encourage a larger and more diverse group of students to study economics. To formally evaluate this aspect of our education program, we surveyed students before and after school talks in…

In 1930, when officials from the Bank of England came to Australia to assist Australian governments with their budgetary problems, they found that the original Commonwealth Bank, then Australia’s central bank, did not have an economist on its staff. They urged the Bank’s Governor to appoint a qualified economist and…

The Reserve Bank’s policy measures to support the economy in the wake of the COVID-19 pandemic have significantly increased liquidity in the banking system. Consequently, market participants have had less need to use some of the Reserve Bank’s liquidity operations and facilities. In response, the Bank reduced the frequency of…

As part of the global policy response to address the economic challenges associated with the COVID-19 pandemic, in August 2021 the International Monetary Fund (IMF) allocated US$650 billion worth of Special Drawing Rights (SDRs) to its members, providing a significant boost to global liquidity. This article details the workings of…

The economic downturn associated with the COVID-19 pandemic has raised questions about the extent to which a deterioration in the financial health of some businesses could lead to breaches of debt covenants – with potential knock-on effects on firm behaviour and loan quality. This article includes a new data set…

Banks play a key role in India’s financial system and underpin economic growth. However, during the 2010s, the health of Indian banks deteriorated significantly and a subsequent decline in credit growth contributed to a slowdown in economic activity. Although Indian authorities have taken a number of steps to strengthen the…

The Term Funding Facility (TFF) was announced by the Reserve Bank Board in March 2020 as part of a comprehensive policy package to support the Australian economy in response to the COVID-19 pandemic. The facility has provided low cost three-year funding to banks operating in Australia against high quality collateral….