##s in mortgage offset accounts and redraw facilities amount to 16 per cent of outstanding housing debt. this is equivalent to around 2½ years of required mortgage payments at current interest rates. it is important to recognise though that this figure masks a lot of variation across households. we estimate that around a quarter of households with a mortgage have either no buffer or a very small one. loan arrears remain low, although they have risen over recent years. also, we estimate that for almost 4 per cent of borrowers their current loan balance exceeds the value of their property. over half of these borrowers are in western australia where there has been a large and persistent decline in housing prices. so this is an area that bears watching. on a completely different matter, i would like to draw your attention to the fact that we will be releasing the new $ 20 note next week, on 9 october. this note is printed here in melbourne, at our printing works in craigieburn. i have brought along a few notes tonight hot off the presses for you to have a look at. i sometimes get asked why the reserve bank is replacing the existing series of banknotes, especially when more of us are moving to electronic payments. people also wonder with contactless payments now so ubiquitous, do we still need banknotes? given these questions, it might surprise you then to know that the demand for banknotes in australia is still strong. the stock of banknotes on issue, relative to the size of the economy, is close to the highest it has been in 50 years. it is possible that low interest rates are part of the story here. all up, there are 14 $ 100 notes on issue for every australian, 30 $ 50s, and 7 $ 20s. that makes for around $ 3000 worth of banknotes on issue for every australian. i, for one, don ’ t have anywhere near that amount. at the rba, we have recently undertaken some work to understand the whereabouts of all these banknotes. it is hard to know exactly, but we estimate that around a quarter are used to make legitimate day - to - day transactions within australia. 1 it also appears that between half and threequarters are held as a store of value in safes, under beds and at the back of cupboards, both here in australia and elsewhere around the world. we estimate that a further 4 to 8 per cent are used in the shadow economy, either to hide transactions from the tax office or

levine m ( 2015 ), “ levine on wall street : culture and retaliation ”, bloombergview, 2 february. available at < http : / / www. bloombergview. com / articles / 2015 – 02 – 02 / levine - on - wall - street - culture - and - retaliation >. bis central bankers ’ speeches the information flow. there are, again, a number of potential solutions to this and i accept there may be some scope to provide more guidance around this recommendation, particularly in the case of less - traded currencies. to conclude, there is a strong expectation that these recommendations will be implemented to deliver an improvement in the execution of foreign exchange transactions referencing fx benchmarks and the integrity of the benchmarks themselves. the fsb has approved the recommendations contained in the fx benchmark group ’ s report. if these recommendations are not implemented, then the likelihood of a regulatory response will increase. bis central bankers ’ speeches