percent, which, if we make a direct comparison, is the level seen in japan at the beginning of 1995. an increasing number of people are now interested in deflation. looking back at developments over the last decade, i have been struck anew by how immensely important it is for the central bank to gain reliable insights into the outlook for the economy. at the same time, we clearly cannot be too surprised at the fact that, with the passage of time, changes have taken place in the debate surrounding monetary policy. we at the central bank must continue to make efforts to gain new insights and learn from new ideas, while not allowing ourselves to fall captive to whatever mindset is dominant at a particular point in time. i feel acutely the importance of further interaction with the academic world, because cutting - edge research on financial and economic theory is fundamental to our efforts. since i assumed the office of governor in march this year, and indeed before, i have had the opportunity to listen to a wide range of advice, and have learnt much from opinions voiced about the bank and forwarded to me not only from members of the society but also from other academics both at home and abroad. at the same time, i am afraid that i must admit to feeling a certain degree of frustration, in the light of my long years of experience as a central banker, as i listen to some of the opinions. i cannot help but feel that there is still significant progress to be made in establishing a creative process whereby the bank first provides academics with sufficient information about the issues it is facing, and then works together with them based on the same information in its search for fresh policy solutions. we are fortunate to have among the current nine members of the policy board three members who have spent a number of years in senior academic positions. in addition, there are an increasing number of former bank staff currently working at academic institutions and devoting their efforts to bridging the gap between theory and practical policy. with their help, we expect to be able to extend our links with the academic world, thus not only gaining the benefit of academics ’ advice but also contributing to their research by sharing our practical experiences. this has been a somewhat protracted introduction. my aim today, however, is to share with you, as frankly as possible, my own current thinking with regard to the conduct of monetary policy, which i hope will be of interest to you. i hope also that my remarks will play a part in further strengthening the constructive

bank, trusted for our analysis and service delivery. now in the second year of this initiative, we have made significant progress, but much work remains. we are an organisation with a broad set of responsibilities : we regulate the payments system and run the infrastructure used to settle payments ; we provide banking services to the australian government, making payments that many australians rely upon ; we issue banknotes that, despite an overall decline in cash transactions, remain an integral part of the australian economy ; and we monitor and contribute to financial stability in cooperation with other authorities. we remain committed to communicating clearly with the public about what we do and why. because of this breadth of responsibility, our transformation is complex. it involves enhancing leadership capabilities, creating a more open and dynamic culture, streamlining operations for greater efficiency, and building resilience – goals shared by many organisations across australia. an often - overlooked aspect of our role is our involvement in running the critical infrastructure used to settle payments. we are at the core of this system, ensuring it functions in a way that can be relied upon by the households and businesses that make up our economy. we are also the regulator of the payments system, with a mandate to promote competition, efficiency, and safety of the payments system. in practice, nearly every electronic payment in australia relies on the infrastructure operated by the rba – whether it ’ s tapping a card for public transport, receiving a salary, or transferring money – and many are processed in real - time. last financial year, the rba settled approximately three million payments daily, worth almost $ 260 billion dollars – an amount equivalent to australia ’ s gdp roughly every ten days ( graph 6 ). graph 6 rits interbank settlement activity * daily averages, quarterly'000 $ b volume ( lhs ) value ( rhs ) s d m j s d m j s d m j s d m j * excluding fss transactions. source : rba. think of the payments system as a train network, with the economy as the train moving vast volumes of transactions. we lay and maintain the tracks that keep money flowing throughout the economy, supporting a strong financial system and efficient payments. as the payments ecosystem evolves, new players like digital wallets and ‘ buy now, pay later ’ services have emerged, enhancing competition and consumer choice. however, these new entrants also introduce risks that may fall outside our current regulatory scope. proposed amendments to the payment systems ( regulation ) act aim to bring these new players