This has been true across short and long time horizons, across countries, including Australia, across asset classes, and across individual sectors within markets (Graph 3 and 4). I will discuss some of the possible explanations for this, drawing on material published in the RBA’s February Statement on Monetary Policy, and also discuss the recent short-lived spike in volatility in equity markets.
At the same time, however, Pillar 3 should not become overly prescriptive. That is why Pillar 3 attaches great importance to qualitative disclosures. This will allow a specific bank to explain and elaborate the particular characteristics of its operations in plain language.