In the United States, the Dodd-Frank regulations on OTC clearing are likely to start taking effect around the second quarter of next year, and in Europe the corresponding regulations under EMIR5 are likely to take effect by around 2013. Even before then, market behaviour, and hence the environment for the Australian banks, will be influenced by the anticipation of those requirements.
Additionally, in 2019/20, COVID-19 created an extraordinary high demand for banknotes resulting in the Bank exceeding the net operating expenses specified under the funding agreement. The excess cost is expected to largely reverse at some stage as we expect the bulk of the growth in banknote volumes issued to be repatriated.