Public consultations will take place on how best to implement the regime, and implementation timelines will allow for a smooth transition for affected institutions, investors, and other market participants. We will need the help of the private sector to design marketable financial contracts that can be bailed-in to resolve a major bank.
Nonetheless, it was by nature a one-time adjustment, and one that has probably now run its course. Another factor in the one-off category is the transition to low inflation and the consequent fall in nominal interest rates. In the late 1980s, mortgage interest rates in Australia reached a now unimaginable 17 per cent.