The planned bank liquidity rule change would be another example of banks and government financial regulators working together to support the economy during the crisis, including through deferred repayments on 900,000 frozen loans worth $274 billion.
The RBA has bought $61 billion of government bonds since March.
Banks are also playing a key role in “stealth” quantitative easing via the RBA’s enlarged $200 billion term funding facility, whereby the central bank offers cheap 0.25 per cent, three-year loans to commercial banks that use the money to buy government debt and earn a profitable yield.
Local banks have been big buyers of public debt during the COVID-19 recession, adding to the 20 per cent of federal government bonds and almost …
Read the full article at: https://www.afr.com/policy/economy/banks-to-fund-government-stimulus-bill-20200907-p55t0f
