Still, there are limits to the ability of supervisors and examiners to monitor banks effectively and control their risks. Market discipline therefore has to be enhanced to support sound corporate governance and complement bank regulation and supervision. The practices of directed lending to support government priorities and lending to wellconnected firms undermined normal incentives for prudent behavior by both banks and business customers.
He has patiently explained difficult economic issues to Australians. He has talked to us about the challenges that Australia faces, but also the opportunities we have. In a world where optimism has sometimes been in short supply, he has more than once reminded us that the glass is at least half full. He has been deliberate, logical, thoughtful and measured in his remarks.