2.1  The positive role of insurance companies and pension funds for financial stability  Insurance companies and pension funds are sub-components of the financial system and their linkages with the banking sector and the securities markets have grown significantly over the past decade.
Banks are required to limit their holdings to around 30 per cent of the stock on issue of these assets, to avoid impairing the liquidity in the market of holding higher amounts. BIS central bankers’ speeches  5  Graph 4  Financial sector Gross bond issuance by Australian banks over the past year has been around its average level since 2007.