Credit risk – the risk that borrowers will not repay their loans – is one of the main risks that financial intermediaries face, and has been the underlying driver of most systemic banking crises in advanced economies over recent decades. This paper explores the <i>ex post</i> credit risk experience...

This paper examines the overall variability of Australian banks’ credit risk during the 1990s. It assesses the extent to which this overall variability can be explained by variability in the level of banks’ aggregate credit risk over time, or alternatively, by variation in the average credit...

As recent experience all too clearly demonstrates, liquid markets do not exist for all financial assets at all times. In some respects, this can be thought of as a market failure. This paper addresses how best to promote asset market liquidity given this market failure, and the appropriate...

The long-running debate about the role of monetary policy in responding to rising asset prices has received renewed attention in the wake of the global financial crisis.This paper contributes to this debate by describing the Australian experience of a cycle in house prices and credit from 2002...