6  RBA (2012), “Box E: Yields on Sovereign Debt”, Statement on Monetary Policy, May, pp 59–60. 7  RBA (2011), “The RBA Committed Liquidity Facility”, Media Release No 2011–25, 16 November. And Debelle G (2011), “The Committed Liquidity Facility”, Speech to the APRA Basel III Implementation Workshop 2011, Sydney, 23 November.
Thus, I cannot see a single good reason why banks should not have to back government bonds in their balance sheets by capital, but I see many reasons why they should. In this area too, we should work to restore the coherence of regulation in the medium term – not least to address the sovereign-bank nexus.