Raising the fixed floor also would be more transparent and predictable for the public and the industry because a firm’s capital requirement would vary less over time. There are drawbacks to the higher fixed floor option, of course.
These are our goals and we are committed to achieving them. An important element of our policy package is the cash rate target being set at what is the effective lower bound of 0.1 per cent (Graph 11). The Board will maintain this setting of the cash rate target until inflation is sustainably within the 2–3 per cent range.