FMI crisis powers and credit line for RBA

Ian Rogers

More robust powers will be enacted to allow financial regulators “to pre-emptively
identify and manage risks, or intervene in a failure crisis” affecting Financial Market Infrastructures.

In the 2021 Budget, the government said the reform package will:

• allow the Reserve Bank of Australia to manage a failure at a clearing and settlement facility;

 

• enhance the supervisory and licensing power of the Australian Securities and Investments Commission and the RBA; and

• streamline regulatory powers to improve the efficiency of regulatory administration.

The reforms will be accompanied by a facility for the RBA to draw up to A$5 billion per event as a last resort measure to ensure the continued operation of clearing and settlement facilities, with any funding to be recovered once a crisis is resolved.