The value of companies listed on the ASX has grown by 275 per cent, and the value of debt securities on issue in Australia has increased by 170 per cent. The growth of turnover in financial markets has been even more dramatic, increasing by 290 per cent over the decade.
This situation of persistently more liquidity than is needed to finance non-inflationary economic growth reflects past portfolio shifts, precautionary savings and the low level of interest rates. The low level of interest rates also supported the annual growth of loans to the private sector, which fluctuated between 4½% and 5% in recent months.