That was followed by the sharp rise in the terms of trade, which was only temporarily interrupted by the financial crisis in the North Atlantic. And most recently, we have seen a boom in investment in the resources sector. Over these 20 years, we have experienced almost uninterrupted growth, a feat not matched by any other developed economy. The banking system has remained strong.
One possibility would be to confine such borrowing to circumstances in which the Federal Reserve judges that the stability of the financial system is at risk – as we did in March. Another would be to grant broker-dealers the same sort of regular access enjoyed by commercial banks. The question has implications for the appropriate regulatory regime for broker-dealers and their parent companies.