the preceding periods included a major recession and the other included a recovery from one. but that is the point. managing to avoid deep downturns has been a major advantage. it has given us an average unemployment rate “ in the fives ” and a low variation around that mean. in summary then, we faced a more volatile world than the one of the “ great stability ” of the previous period. it was a world characterised by massive swings in our terms of trade, and a very serious international financial crisis followed by a deep global recession, not to mention the effects of the adoption of “ non - conventional ” policies in the major jurisdictions. and yet the australian economy avoided a major downturn and turned in a performance on economic activity characterised by no more, and on some metrics slightly less, volatility. we have achieved the inflation target and with an average unemployment rate of between 5 and 6 per cent. had anyone, a decade ago, accurately forecast all the international events and simultaneously predicted that things would turn out in australia as they have, they would not have been believed. but here we are. no doubt many factors were at work in achieving this. the economy's inherent ability to adapt has been considerably better than in past episodes of large shocks. i think that is a tribute to various reforms over earlier years and the better management of many individual enterprises. policy frameworks functioned effectively. the exchange rate responded to the external shocks in the way it is supposed to. prudential supervision was effective. the managements of the most important financial institutions managed to avoid being caught up in a major way in the things that brought so much grief to their counterparts elsewhere in the world. fiscal policy played a major countercyclical role in the most acute phase of the international downturn ( though how much latitude it would have to do that again, if needed, is less clear ). and as you would expect, i think that the monetary policy framework has functioned very well. the operation of that framework has involved : • an independent central bank focusing on the medium - term inflation target, taking account of the state of the real economy and the shocks affecting it ; • neither neglecting financial stability considerations nor letting them completely dictate monetary policy ; • allowing the floating exchange rate to adjust ; and, importantly, • realism and a degree of modesty, about what monetary policy can achieve. bis central bankers ’ speeches i think it can be said that, operating this framework and under the

not as liquid as for the 3 - month and 6 - month tenors. unlike for these longer tenors, banks have no incentive to issue 1 - month bills. this is because under the liquidity standards, they would be required https : / / www. rba. gov. au / speeches / 2019 / sp - ag - 2019 - 03 - 19. html 16 / 19 3 / 19 / 2019 bonds and benchmarks | speeches | rba to hold an equivalent amount of high - quality liquid assets. [ 12 ] the few transactions that do occur are mainly ones where investors are selling their bills back to the banks. while there are enough transactions to directly measure 3 - month and 6 - month bbsw on most days, this has only happened about half the time for 1 - month bbsw. [ 13 ] since the new calculation methodology was introduced, 1 - month bbsw has also been more volatile than 3 - month bbsw. this was particularly evident in mid january ( graph 16 ). so the lack of liquidity in the underlying market for 1 - month bills appears to be affecting the benchmark. graph 16 given these issues, users of 1 - month bbsw should be preparing to use alternative benchmarks. this is particularly relevant to the securitisation and derivatives markets, which frequently reference the 1 - month rate. consistent with this, the reserve bank is thinking about this issue given that it is relevant to a number of securities that we hold via our market operations. one option would be for issuers to instead reference 3 - month bbsw ; another option is to reference the cash rate. it will be important for market participants to evaluate the best options and make progress towards these in a timely manner. the cash rate is the alternative risk - free rate for the australian dollar the cash rate is best known as the reserve bank board's operational target for monetary policy. but it is also a significant benchmark in australian financial markets. the cash rate is administered by the https : / / www. rba. gov. au / speeches / 2019 / sp - ag - 2019 - 03 - 19. html 17 / 19 3 / 19 / 2019 bonds and benchmarks | speeches | rba rba and calculated directly from transactions in the interbank overnight cash market. with the transition from libor to risk - free rates internationally, we would expect there to be some corresponding migration away from bbsw towards the cash rate. this is particularly the case for financial products