We needed to ensure that our local credit-based benchmark, BBSW, was included in the ISDA fallbacks and protocol. In time, the Reserve Bank will require securities that reference BBSW to include the relevant ISDA fallback provisions in order to be eligible as collateral in our market operations.
Needless to say, climate policy is a much more multi-faceted problem than monetary policy, and its effects materialize over a longer time horizon. The risk of policy reversals is very real, though: The transition to a carbon-neutral society can have short-term costs for households and firms. The positive long-term effects are not immediately visible. This can weaken political support for climate policies.