Jones Speaks On Future Risks And Need To Be Prepared

RBA Assistant Governor Jones has spoken on the “Emerging Threats to Financial Stability – New Challenges for the Next Decade” and notes that risk events will look different going forward and some won’t have a “historical precedent”. Thus scenario analysis and stress testing will become more important.

• Jones divides the risks into “internal” and “external”. The internal ones include rapid deposit runs due to the digital world, higher rate volatility and aggregate spillovers from entities that are not important on their own. External includes the usual geopolitics including increasing trade restrictions, climate change and operational risk.
• He then goes on to give details around each risk and notes that regulation will need to change but also businesses will have to adapt to the changing world they work in to become more resilient.
• See speech here.