This is indeed subject to debate, but the doubts raised are not about whether or not it should be done, but rather about how and when to achieve it. Some countries believe that it is first necessary to reduce the risks in banks before sharing them, but we are in favour of making progress on both risk reduction and risk-sharing in parallel.
If the Reserve Bank wanted to tighten financial conditions, by taking funds out of the system, the private sector could no longer immediately offset that by getting those funds back by selling foreign exchange to the Reserve Bank: we were no longer obliged to buy or sell foreign exchange at a given price.