At the same time, particular types of investors or depositors are assumed to be less stable than others (in terms of their likelihood of withdrawing funds), which also results in a greater need for liquid assets. As has been known for some time, the Australian financial system does not have an especially large stock of HQLA.
1 The only instruments that have been deemed to meet the Basel standard of liquidity are debt issued by the Commonwealth and state governments (CGS and semis) along with cash balances at the Reserve Bank. The banking system’s overall liquidity needs are greatly in excess of what could reasonably be held in those assets.