That is the good news. But in playing this stabilising role, there is also a downside. The exchange rate appreciation has taken pressure off domestic capacity by making it cheaper for Australians to buy imported goods and by reducing the competitiveness of firms in export markets.
Regulatory certainty Strengthening the regulatory framework through the Single Rulebook and establishment of the Banking Union have made Europe’s banking sector and the financial system as a whole more stable and resilient. Banks’ capital positions have been strengthened; leverage has been reduced; and business models and funding models are continuing to be adjusted. We should not undo this achievement.