digital money and infrastructure could increase the efficiency and resilience of wholesale markets where money and assets are tokenised. broader financial stability risks 2 / 3 bis - central bankers'speeches before i turn the floor open to questions, it would be remiss not to briefly mention that our focus on financial stability extends beyond the areas of payments and market infrastructure. as i discussed last year, and as set out by recent editions of the financial stability review, we see risks to financial stability as taking two broad forms. 5 traditional cyclical risks generated from within the financial system these include the effects of higher interest rates or an economic downturn on the resilience of households, firms and banks. these types of risks have long featured in our surveillance work and will continue to do so. non - cyclical risks generated from outside the financial system these have become more prominent in recent times and there is generally little historical precedent to guide us in navigating them. foremost here are geopolitical risks, operational risks ( including but not limited to cyber risks ) and the risks associated with climate change. our assessment is that this second category of risks continue to build in troubling ways. they not only have the potential to be systemic, but could also cut across the financial system, economy and society in complex ways. for these reasons, the rba and other member agencies comprising the council of financial regulators are stepping up the intensity of work in these areas. at the same time, the worsening threat landscape – which is more structural than cyclical in nature – requires industry to actively prepare for a much more challenging operating environment in the years ahead. thank you. 1 rba ( 2024 ),'payments system board 2024 annual report '. 2 rba ( 2024 ),'merchant card payment costs and surcharging ', issues paper, 15 october. 3 rba and australian treasury ( 2024 ),'central bank digital currency and the future of digital money in australia ', september. 4 jones b ( 2024 ),'financial innovation and the future of cbdc in australia ', speech at the intersekt conference, melbourne, 18 september. 5 see, for instance, rba ( 2024 ),'financial stability review ', september ; jones b ( 2023 ),'emerging threats to financial stability – new challenges for the next decade ', sydney, 31 october. 3 / 3 bis - central bankers'speeches

speech opening statement to the house of representatives standing committee on economics philip lowe governor canberra – 16 september 2022 good morning chair and members of the committee. thank you for holding this hearing. at the reserve bank, we take these hearings very seriously. they are a critical part of the accountability process and my colleagues and i are committed to answering your questions openly and transparently. the previous hearing was held in early february. a lot has changed since then. i would like to highlight three of these changes : 1. the decline in unemployment. 2. the surge in inflation. 3. the earlier and sharper - than - expected increase in interest rates. lower unemployment in february, the unemployment rate stood at 4. 2 per cent. today, it is 3½ per cent. this is the lowest unemploy ment rate in almost 50 years. labour force participation has also increased, so that a higher share of the workingage population has a job than ever before. and underemployment is lower too, as people who work part - time are finding it easier to get the hours they want. i wanted to recount these facts because the improvement in the australian labour market is a major achievement. australians are finding it easier to get a job than they have for a long time. young people and women are benefiting most from this and they have greater opportunities. our economy and our society are stronger as a result. higher inflation in contrast, the second change since february – the increase in inflation – is an unwelcome one. when the previous committee met in february, underlying inflation in australia had just reached the midpoint of the 2 to 3 per cent target range for the first time in many years. seven months on, we are in a very different position. inflation has very quickly gone from being too low, to being too high. over the year to june, the headline inflation rate was 6. 1 per cent. it is expected to increase further over the months ahead to peak at around 7¾ per cent later this year. inflation is then expected to start declining, to be back around 3 per cent late in 2024. global factors explain much of this increase in inflation. russia ’ s invasion of ukraine resulted in major disruptions to energy markets, increasing retail energy prices around the world. and covid - related interruptions to global production are still rippling through global supply chains, pushing prices up. the demand for goods in global markets has also been very strong