The diversity and depth of Australian markets, by ensuring that avenues of financing are always available, also add to the resilience of the economy. I would also give some credit to the financial sector for contributing to the reduction in inflation volatility we have seen over the past 15 years.
Part of this can be traced to the reduced pass-through to inflation of changes in the exchange rate, which, in turn, has been partly attributable to the increased use of exchange rate hedging by firms. Conclusion So let me end by saying that it is clear that the growth of financial markets and the growth of the economy are closely intertwined.