I must add, however, the turmoil also made clear that investors did not make full use of available information and placed excessive reliance on external ratings. Taken together, these factors resulted in banks and investors assuming excessive risk and concentration to the subprime sector – either directly or indirectly through structured products based on subprime mortgages.
In 2018, as a first step towards addressing the gaps in our legislation regarding cash, the Reserve Bank Act’s purpose statement was amended to focus on prosperity and well-being, and a requirement to issue bank notes and coins to meet the needs of the public was added (Figure 4).