After recent extended efforts to moderate this economy, policymakers might need to apply the brakes in response to rising consumer prices. This could be very disruptive, risking loan defaults, poor bank balance sheets, capital controls, exchange rate tensions, import protection and a regional slowdown. One effect would be to hit industrial commodity prices.
For example, the Australian Office of Financial Management (AOFM) extended the average tenor of CGS issuance in 2011/12 by over a year to 7.7 years,3 while over the past 12 months the tenor of corporate issuance has increased to nearly 11 years, compared with an average of 8 years since the beginning of the financial crisis.