reduce the amount of liabilities that roll off in less than 30 days. deposits which are deemed to be subject to high run - off rates and those which are callable within 30 days will be more expensive for banks. banks are therefore working towards converting many of these less stable deposits into a more stable deposit base. for example, retail and sme deposits are deemed to be ‘ stickier ’ than institutional deposits. part of this transition is being induced by price signals : interest rates offered on new or existing deposit products which are deemed to be more stable are rising relative to interest rates on products deemed to be less stable. these types of changes appear to have accelerated recently as we draw closer to the implementation of the lcr and probably still have some way to run. to date, we have seen only a few banks offer notice of withdrawal accounts to customers. these accounts require the depositor to provide the bank with 31 days or more notice of a withdrawal ( obviously 31 days is one day longer than the 30 - day liquidity stress period ). interest rates offered on these accounts are among the higher rates offered in the deposit market. it may be that we see a broader move to these types of accounts or changes in terms and conditions on existing accounts through the course of next year. we have also seen a fall in the growth of term deposits relative to transaction and at - call deposits over the past few years. in fact term deposits as a share of banks ’ funding has been falling while transaction and at - call deposits have been growing strongly. part of this is because a flattening of the yield curve has made investors less inclined to invest in longer term deposits. but in part it is because under the lcr, some transactional and operational deposits are subject to lower run - off rates than deposits that are largely attracted by higher interest rates. indeed, there has been some indication that banks have been transitioning depositors into deposit products treated more favourably under the lcr. but banks are not limited to just changing their deposit offerings. we could see them look for more opportunities to package retail deposits with other products as the deposits of customers that also have other relationships with the bank are deemed to be more stable under the lcr. so to conclude, the full implementation of the new liquidity regime in australia is imminent. from the beginning of next year, banks in australia will be fully subject to the liquidity coverage ratio. this has already had an impact on the pricing and nature of a number

is to have the banks hold more liquid assets. to address these circumstances, an important component of the liquidity regime in australia is the committed liquidity facility ( clf ) where, on the payment of a 15 basis point fee, banks will be able to obtain a commitment from the reserve bank to provide liquidity against a broad range of assets under repurchase agreement. 2 apra has recently determined that the total clf requirements of the australian banking system for 2015 amount to around $ 275 billion. 3 this amount was determined by first assessing that the amount of cgs and semis that could reasonably be held by banks without unduly affecting market functioning was $ 175 billion. the reserve bank provided this see apra ( 2014 ), ‘ implementation of the basel iii liquidity framework in australia ’, media release no 14. 03, 30 january, available at < http : / / www. apra. gov. au / mediareleases / pages / 14 _ 03. aspx > ; and debelle g ( 2012 ), “ regulatory reforms and their implications for financial markets, funding costs and monetary policy ”, address to the financial services institute of australia, 18 september. domestic market operations – the committed liquidity facility. see apra ( 2014 ), “ apra finalises implementation of liquidity coverage ratio in australia ”, media release no 14. 22. available at < http : / / www. apra. gov. au / mediareleases / pages / 14 _ 22. aspx >. bis central bankers ’ speeches assessment to apra. the clf amount is then simply the difference between this and the overall liquidity needs of the system. the banks that require a clf from the reserve bank sign a deed of agreement with us and pay their fee before the end of this year. then from the beginning of next year, the arrangement comes into effect. i have talked before about some of the impact on pricing in various markets of the new liquidity regime. 4 we have attempted to limit the impact on the price of cgs and semis, but necessarily, because the banks are holding more of these securities than previously ( graph 1 ), the price is higher ( and the yield lower ) than would otherwise be the case. graph 1 overall, the impact of the lcr on market pricing is relatively small. the larger changes have been around deposit pricing and the terms and conditions of deposits, which i will come to shortly