The Reserve Bank has rejected calls to delay global banking reforms, saying Australia cannot "opt out" of rule changes designed to make the international financial system safer.
With some bankers urging regulators to defer changes because Australia avoided the worst of the global financial crisis, assistant governor Guy Debelle said on Wednesday these arguments made little sense.
Under liquidity rules due to begin in 2015, banks will be forced to hold enough easy-to-sell assets to cover lending outflows for a month. Alongside tougher capital requirements, the changes are likely to dampen bank profit growth and some have expressed concern that Australia is racing ahead of the world, after some countries delayed the liquidity changes until 2019.
But Dr Debelle dismissed the calls for delay, despite some concerns the full impact of global regulatory changes was not well understood. "The capital inflows that the country has experienced over many decades are sourced from the global financial system. Given that, we don't have the option just to opt out when we don't like particular aspects of it," Dr Debelle said at an Australian Centre for Financial Studies conference in Sydney.
Dr Debelle argued there was indeed a need for a global inquiry into the full effect of regulatory changes in finance, but said Australia should also learn from what had occurred in other countries' financial systems. "The fact that some of these problems didn't eventuate here doesn't mean it is not a good idea to stop them happening here in the future," he said.
Dr Debelle declined to comment on the government's planned 0.05 per cent levy on deposits.
Also speaking at the conference was RBA board member Heather Ridout, who stressed the potential of infrastructure as an asset class.
She said there was no shortage of capital willing to invest in infrastructure, but governments needed to play a leadership role that could include increased borrowing by state governments to finance the initial construction of projects.