But the issue of an appropriate regime to enhance banks’ loss absorption and recapitalisation capacity, as recommended by the FSI, is still being considered. We will be watching developments overseas on this issue closely to determine the most appropriate regime for Australia.
In conclusion, I want to reiterate that the concentration of the banking system in four major banks in Australia does not necessarily provide financial stability benefits. Nor is it necessarily detrimental to financial stability. But the systemic importance of the four major banks in Australia does mean that they need to have a proportionately greater supervisory focus.