Since it might not be fair to assume up-front that all unrated entities are high risk entities, we have decided to presently adopt the 100 per cent risk weight for unrated exposures – as prescribed in the Basel II framework.
It is complementary to the necessary and welcome significant fiscal stimulus provided by the Australian Government and the states and territories. Its aim has been to deliver low borrowing costs for households, businesses and the government. These low borrowing costs are a necessary precondition to support investment and spending as confidence in the health and economic outlook improves.