First, the smooth functioning of the settlement of cross-border payments, mainly performed through the TARGET system, allows banks to trade safely throughout the euro area. Second, the swift acceptance of euro area indices (EONIA and Euribor) forms a common basis for pricing. The experience with TARGET demonstrates the importance of the market infrastructure in allowing arbitrage to operate effectively.
Looking forward, there is a high degree of uncertainty about the outlook and our economic recovery depends upon how successful we are in containing the virus. In our baseline scenario, we are expecting the Australian economy to contract by around 6 per cent this year, and then grow by 5 per cent next year and 4 per cent in 2022.