the need to restore the public's faith in the foreign exchange market and the value of the global code in assisting that process and also in helping improve market functioning and confidence in the market. 1 see www. bis. org / mktc / fxwg / gc _ may16. pdf. 2 see www. bis. org / press / p150511. htm. 3 see www. bis. org / mktc / fxwg / am _ may16. pdf. see also c salmon ( 2016 ), ‘ rebuilding trust through the “ fx global code ” : reasons for optimism ’, available at www. bankofengland. co. uk / publications / documents / speeches / 2016 / speech924. pdf, speech given at the aci uk square mile debate, london, 7 september ; and s potter ( 2016 ), ‘ the role of best practices in supporting market integrity and effectiveness ’, available at www. newyorkfed. org / newsevents / speeches / 2016 / pot160907, remarks at the 2016 primary dealers meeting, federal reserve bank of new york, new york city, 7 september. 4 see afxc. rba. gov. au / news / afxc - 26052016. html. 5 see www. bis. org / press / p160526a. htm. 3 / 3 bis central bankers'speeches

for liquidity during that period of extreme uncertainty. graph 3 the composition of the balance sheet also reveals how the various monetary policy tools are being used. in the early stages of the pandemic, liquidity was supplied via omos and hence the domestic repo market, while the foreign exchange swap book was allowed to run off ( graph 4 ). there was also a sizeable increase attributable to the bank's purchases of government bonds. more recently the tff has played an increasing role ; most of banks'initial allowances were drawn down by the 30 september deadline for that part of the facility. at the same time, short - term repos have been rolling off. this change in the composition of the rba's balance sheet is clearly evident in the large rise in the average residual maturity of the assets held by the bank. this is consistent with the need for monetary policy support to be provided for some time given the economic outlook and the prospect of an extended period of high unemployment. graph 4 this perspective of balance sheet size and composition is useful for comparing our current suite of policy measures with the stimulus undertaken during the gfc. the reduction in the cash rate target was much larger during the gfc – 400 basis points compared with a reduction of 50 basis points this year. of course that reflects the fact that more recently the cash rate has been close to its effective lower bound. in both cases, the initial expansion in the balance sheet was in the order of 5 per cent of gdp. but in the current episode, the nature of the expansion has been quite different compared with the gfc. during the gfc the main focus of active balance sheet expansion ( which is evident in graph 4 ) was on satisfying the precautionary demand for short - term liquidity, while a deprecation in the australian dollar also boosted the value of the bank's foreign reserve assets. satisfying precautionary demand was also important in the early stages of the pandemic, but subsequently the mix of assets shifted to longer - term repos ( via the tff ) as well as government bonds. consequently, the breadth and the durability of the easing in financial conditions associated with these balance sheet tools has been greater now than was the case during the gfc. conclusion the bank is using a number of monetary policy tools as part of the package of measures adopted to support the economy through the pandemic. this means that the task of assessing the stance