1 One of the areas of the market that suffered the greatest impact from the crisis was asset-backed securities, due to the loss of investor confidence in this asset class globally. This resulted in the stock of outstanding Australian asset-backed securities nearly halving, in nominal terms, and declining three-fold relative to GDP since mid 2007.
APRA is the regulator of institutions – it supervises the banks, sets prudential standards and holds a wide range of directive and resolution powers. The RBA is the liquidity provider to the financial system, it has regulatory powers of its own in respect of clearing and settlement facilities and the payments system, and it incorporates financial stability assessments in its monetary policy decision process.